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Recalcitrant Debtor: GTCO switch to aggressive recovery plan on Aiteo’s Forbearance Loan…… + Aiteo’s Legal and Financial Struggles…

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Guaranty Trust Holding Company (GTCO) is preparing to write off a significant loan extended to oil and gas company Aiteo Group, while also launching an aggressive recovery strategy.

 

The loan, which has been a source of concern for GTCO for several years, is set to be written off before the end of 2024, as disclosed by GTCO’s MD/CEO Segun Agbaje during the bank’s 6-month investor earnings call.

 

The Aiteo loan has been GTCO’s primary forbearance loan, and despite restructuring efforts, the outcome has not met the bank’s expectations.

 

 

Agbaje expressed the company’s readiness to move forward by writing off the loan and focusing on aggressive recovery measures.

 

This significant move, expected to be finalized by the end of 2024, will see GTCO remove the loan from its books without causing a substantial impact on its financial performance.

 

 

Forbearance and the Aiteo Loan…

 

 

The Aiteo loan, GTCO’s largest forbearance issue, has been problematic for years. According to Agbaje, the bank had restructured the loan in an effort to give Aiteo more time to meet its obligations.

 

However, these efforts failed to produce the desired results. With the forbearance period set to expire in 2024, GTCO has no intention of granting further leniency.

Agbaje stated, “We’ve put ourselves in a position to write off that loan this year, and it won’t affect our P&L.”

GTCO has been transparent about the challenges it has faced with the Aiteo loan, with Agbaje expressing frustration at the lack of progress.

 

 

“It hasn’t gone the way we like, and I’m a bit tired of making excuses for it,” he said during the call, outlining the bank’s plans to move forward aggressively in recovering the funds.

Capital Buffers and GTCO’s Loan Book

 

During the call, Agbaje explained that GTCO had already provisioned over 50% in capital buffers for its Stage 2 loans, including the Aiteo loan.

 

 

This provisioning allows the bank to absorb the losses associated with the non-performing loan without undermining its profit and loss (P&L) statement.

“We’ll probably write off the Aiteo loan this year and then go aggressively on a recovery drive because we don’t like how it’s been playing out,” Agbaje stated.

 

GTCO’s loan book currently stands at around N3 trillion, with the Aiteo loan representing a substantial portion of its non-performing loan portfolio.

 

 

Agbaje emphasized that the size of the loan book, not necessarily the quality of the loans, contributed to the Aiteo loan being a larger percentage of the bank’s portfolio.

He indicated that if the loan book were closer to N7 trillion, the impact of the Aiteo loan would have been less significant.

Nonetheless, the bank’s strong capital buffers ensure that it is well-positioned to absorb the impact of this write-off.

 

 

Aiteo’s Legal and Financial Struggles…

 

 

Aiteo’s financial woes are not new. In fact, the oil and gas company has been embroiled in a series of legal battles with its lenders, including GTCO.

 

These disputes date back to 2014, when Aiteo took out loans from Nigerian banks and the African Finance Corporation (AFC) to acquire Oil Mining Lease (OML) 29 from Shell Petroleum Development Company (SPDC).

The loans, amounting to about $2 billion, were largely financed by a syndicate of Nigerian banks, including GTCO, which collectively contributed 75% of the funding, while Shell provided the rest via a vendor financing arrangement.

 

 

 

The repayment of these loans has been fraught with delays and legal complications. In 2019, the lenders demanded repayment within seven days, but Aiteo refused, asserting that it was not liable to meet those demands.

Citing operational challenges and invoking Force Majeure, Aiteo argued that it had requested a restructuring of the loan facility, which the lenders did not accept. Aiteo then initiated legal proceedings in Nigeria, seeking a declaration of non-liability from the courts, but this only led to further complications.

In response to Aiteo’s legal maneuvers, the banks—including GTCO—took the matter to arbitration in the United Kingdom, seeking to enforce the terms of the original loan agreements.

 

 

In April 2022, a UK high court ruled in favor of the lenders, including GTCO, granting them an anti-suit injunction that restrained Aiteo from pursuing legal action in Nigeria.

 

 

Additional Reports By Nairametrics!

 

Society

Billionaire Femi Otedola’s mother, Christine, receives prestigious Papal honour…

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In a remarkable recognition of her selfless service to the Catholic Church and society, Mrs Christine Doja Otedola, mother of renowned businessman Femi Otedola, has been conferred with a Papal Honour by Pope Francis.

 

 

A Papal Honour, also known as a Pontifical Honour, is a prestigious award conferred by the Pope, the head of the Catholic Church, on individuals who have demonstrated exceptional service, dedication, and commitment to the Church and society.

 

The honour, one of the highest in the Catholic Church, was presented to Mrs Otedola by His Grace, Archbishop Alfred Adewale Martins of the Metropolitan See of Lagos, on behalf of the Pope, on September 14.

 

Mrs Otedola was specifically recognised in the Pro Ecclesia et Pontifice category, a testament to her unwavering commitment to the Church and humanity.

 

Femi Otedola took to his X page to celebrate his mother’s achievement.

 

 

Sharing photos from the ceremony and expressing his pride, he wrote: “Congratulations, Mummy – Dame Christine Doja, on your award of the Papal Honour of Pro Ecclesia et Pontifice by His Holiness Pope Francis. This is an honour well deserved.”

 

 

 

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Real Reasons ICPC Arrests El-Rufai’s Finance Commissioner, Shizzer Joy Nasara Bada At Lagos Airport

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Bada was reportedly travelling out of the country on Sunday when ICPC operatives apprehended her at the Murtala Muhammed Airport in Lagos. 

 

 

 

Operatives of the Independent Corrupt Practices and Other Related Offences Commission (ICPC) have arrested a former Commissioner of Finance and Accountant General in Kaduna State, under Nasir el-Rufai’s administration, Shizzer Joy Nasara Bada at the Lagos Airport.

 

 

Bada was reportedly travelling out of the country on Sunday when ICPC operatives apprehended her at the Murtala Muhammed Airport in Lagos.

 

The ICPC officials said there was rising suspicion of a potential escape in the wake of mounting corruption allegations against the ex-governor el-Rufai, and herself.

Sources close to the government indicated to The Guardian that the ICPC had been tracking Bada’s movements after receiving an intelligence report suggesting that she might leave the country to evade investigation.

 

 

 

The arrest came as part of a broader crackdown on officials who served under el-Rufai’s administration, with multiple figures now under scrutiny for their roles in the alleged financial mismanagement of the state.

 

 

Already, el-Rufai has been indicted by the Kaduna State House of Assembly in its committee report of allegedly syphoning N423 billion from the state treasury. While the specific allegations against Bada remain under wraps, insiders believe they are connected to large-scale financial irregularities, including the mismanagement of public funds and alleged embezzlement.

Bada’s arrest has sparked widespread interest, with political observers questioning whether this could be the beginning of a wider probe into the former governor’s administration.

 

 

 

The Commission is expected to provide more details as the investigation unfolds, potentially exposing a web of corruption that could implicate several top figures.

Recall that Nasir El-Rufai, had also initiated a legal action against the Kaduna State House of Assembly following its claim that his administration misappropriated N432 billion during his eight-year tenure, resulting in significant state debt.

 

 

 

A fundamental rights suit was filed at the Federal High Court in Kaduna in June by the former governor’s attorney, Abdulhakeem Mustapha, a Senior Advocate of Nigeria.

 

 

 

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Pre-paid meter bills: Nigerians dump electrical appliances to cut cost  …..

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Usage of electrical appliances is one lifestyle Nigerians have come to embrace to achieve ease and save time in the various activities they perform in their homes.

 

 

During the era of pre-paid metres, gadgets such as electric stove, cooker, blenders, washing machines, boiling rings, pressing iron, deep freezers, among others, were highly purchased by households to either upgrade their kitchens or ease time in activities surrounding their lives.

 

 

Many especially women join thrift’s contribution (ajo or esusu as popularly known in Nigeria) to be able to raise money to purchase some of these items thereby putting smiles on the faces of producers and distributors of such gadgets.

 

However, the economy and lifestyle has discovered that many households have now abandoned the use of most of these gadgets since the introduction of prepaid meters.

 

Some ended up selling them to people selling fairly used products or other people still on post paid meters.

 

 

Mrs. Bridget Johnson, a banker said: “ Since I started using prepaid meter, I have stopped using most of my gadgets, especially the electric cooker, washing machine, pressing iron, among other things.

 

“We watch television set once a day. I had to buy an ipad where I downloaded various types of cartoons and educational materials for my kids to keep them busy.

 

“We switch off the lights and put on my fridge for three hours and switch it off once it is iced for a day.

 

“The rate at which the prepaid meter runs is alarming of recently.

 

 

Before I pay N32 per unit and when I load N10,000 with strict adherence to the rules my husband and I placed in the house it lasts us up to two weeks for the bills to get exhausted.

 

 

But recently, I discovered that when I loaded the N10,000 it wasn’t up to the two weeks before it finished.

 

“I had to call the electricity distribution office where they told me I had been transferred to band A.

 

“I was so pissed off with such a transition but had no choice than to accept it .

 

“In Nigeria of today you have to cut costs whether you like it or not.”

 

 

Mr. Shodimu Olorunfemi, a businessman, said: “Using a prepaid meter has its own advantages. “One of them is regulating what you consume.

 

“By doing so you have to forfeit carrying out certain lifestyles, especially using electronic gadgets that consume lots of electricity.

 

“Such gadgets like electric cooker, hot plate, pressing iron, refrigerator, Air conditioner, among others consume higher units of electricity.

 

 

In my house, I prohibited the switching on of lights during the day and also watching television all the time.

 

“Except I have a very important event I want to attend, I don’t iron my clothes. I pick the clothes for each day and hang them to straighten up.

 

 

My wife and I had to give out most of our gadgets to family members and friends who use post paid meters.

 

“With this development and the state of the economy, those selling electronic gadgets are on the losing side because people like us will not even have a spoilt gadget talk of buying a new one.”

 

For Mrs. Bakare Judith, a secretary and newly wed, she sold all her home appliances that consume high electricity units.

 

“I had to sell most of the electric gadgets I brought to my husband’s house when I discovered that he was using a prepaid meter.

 

 

I use the blender once in two months and ironing is done once in a blue moon.

 

 

 

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