Economy
N40b Debt: MRS Oil, AMCON Agree Out-of-Court Settlement
In a bid to settle out of court the debt of N40billion,Asset management Corporation of Nigeria AMCON and MRS Holding limited has filed terms of settlement before a Federal High court in Lagos south west Nigeria.
MRS Oil and Gas Company limited and its subsidiaries are primary obligors under a syndicated loan facility in the sum of $40 million availed to them by a consortium of Nigerian banks pursuant to a bridge facility agreement dated November 18, 2008 and a supplemental bridge facility agreement dated September 18, 2009.
The syndicated loan facility was for the purpose of acquiring Chevron Texaco downstream operations in West Africa.
The security package for the syndicated loan facility included a personal guarantee from the Chairman of MRS Oil and Gas company Mr Sayyu Dantata, as well as a corporate guarantee and indemnity from each of Corlay Global S. A., Ovals Trading S. A. and Societe Nationale D’Operations Petrolieres de Cote D’Ivoire.
The syndicated loan facility was subsequently classified as non-performing loan and acquired by AMCON pursuant to the provisions of the AMCON Act.
In a bid to recover the debt AMCON instituted a suit AMCON versus Petroci and another,. MRS subsequently applied to be joined as a party to the action and filed a counter -claim against Petroci.
In that suit, AMCON and Petroci executed Terms of Settlement on June 16, 2015 in the sum of $90 million, the terms were subsequently entered as the consent judgement on June 29, 2015.
In relation to the proportion of the debt that remains outstanding AMCON commenced suit (winding Up Proceedings) on July 4, 2016 against MRS as the respondent on the ground of MRS inability to pay its debt.
The winding up proceedings seeks an order of the court winding up MRS for being insolvent company.
AMCON also commenced suit number FHC/L/BK/04/2016(the bankruptcy Proceedings against Mr Sayyu Dantata, Chairman of MRS, on the basis of a personal guarantee dated September 17, 2008 to repay the sum of N350 million in the event of a default by MRS to repay the syndicated loan facility.
The parties now agreed to settle fully and finally the dispute concerning the debts
Now it is hereby agreed that:
- MRS shall pay to AMCON, the sum of N42 billion in full and final settlement of all sums due and owing to AMCON by MRS pursuant to the syndicated loan facility extended to MRS, and AMCON shall hereby release and forever discharge all claims against MRS, its parent, subsidiaries, assigns, transfees, representatives, principals, agents, officers, and directors subject to the following terms and conditions:
MRS shall between the 1st day of February 2018 and 10th day of April 2018 pay over to AMCON the sum of N2 billion of which the sum of N1 billion is acknowledged as having been paid.
(b)MRS shall pay the balance of N40 billion over a period of four years at an interest rate of 9% per annum on a quarterly basis.
(c)The sum of N2.5 billion plus accrued interest shall be paid by MRS on a quarterly basis, commencing ninety days from the effective date being 1st February 2018.
(d)MRS shall provide an acceptable unconditional bank guarantee with four year tenor from a reputable bank to back up the quarterly payment envisaged under this Terms of Settlement. A maximum period of ninety days shall be afforded to MRS to procure and provide the bank guarantees envisaged under this Terms of Settlement.
(e)MRS agrees to be bounded by the terms and conditions contained in the offer letter dated March 22, 2018 to which a breach of any of these terms would automatically become enforceable.
(f)AMCON shall accept lump sum prepayment without penalty.
2 AMCON shall be entitled to call in the bank Guarantee in the event of a default in making the quarterly payments, without the requirement to give notice.
AMCON shall be entitled to cancel all the concessions granted under this terms of settlement and call in the total balance outstanding in the event of default of any of the terms and conditions undertaken by MRS under the terms of Settlement
- Upon full payment of the total sum of N42 billion in full and final settlement of all sums due and owing to AMCON, AMCON agrees to release and discharge MRS, its parent, agents and Directors from liability and obligation to it in connection with the debts.
- It is expressly agreed between parties that the terms of settlement herein compromises all prior and existing judgement obtained against MRS and its directors.
- Upon execution of this agreement and payment of the sum of N2 billion, as contained in clause 1(a) above, AMCON shall immediately discontinue and withdraw all pending court case between parties in relation to the debt subject mystery of this settlement agreement, the winding up proceeding and the Bankruptcy proceedings and filed and adopt these terms as a consent judgement in the winding up proceedings.
- These terms of settlement are expressly without prejudice to MRS’s ability to maintain and pursue the MRS’s Counter Claims in the Petroci Proceedings and/or purse the MRS’s counter claims against Petroci in arbitration or otherwise.
- AMCON agrees, on behalf of itself and on behalf of its parent and agents or Directors, not to sue, commence, voluntarily aid in any way prosecute against MRS or it agents or Directors any action or proceedings concerning the release claims, in this jurisdiction or any other
- Parties to bear their respective litigation cost.
The terms of Settlement was endorsed on behalf of AMCON by: their counsel Adeniyi Adegbomire SAN, Head, Energy group, Sulaiman Abdul Majeed, Group Head, Credict Joshua Ikioda, and a Director, Secretary, and a lawyer Oladapo Ajayi on behalf of MRS Holding limited.
By Dipo Olowookere
About 0.04 per cent was recovered on Friday from the loss recorded by the Nigerian Exchange (NGX) the previous due to profit-taking.
Yesterday, investors were in the market with renewed vigour, mopping up stocks trading at relatively cheaper prices.
According to data, the insurance counter gained 0.41 per cent, the banking sector appreciated by 0.38 per cent, and the consumer goods index grew by 0.14 per cent.
The gains achieved by these three sectors were enough to lift Customs Street at the close of business despite the 0.26 per cent decline printed by the industrial goods segment and the 0.14 per cent loss suffered by the energy industry. The commodity counter was flat during the session.
A total of 43 equities gained weight on the last trading day of this week, while 26 equities shed weight, indicating a positive market breadth index and strong investor sentiment.
Red Star Express increased its share price by 10.00 per cent to N13.20, NCR Nigeria grew by 9.97 per cent to N128.55, SCOA Nigeria inflated by 9.96 per cent to N14.90, Omatek appreciated by 9.94 per cent to N1.77, and Deap Capital expanded by 9.85 per cent to N4.46.
On the flip side, McNichols decreased by 8.81 per cent to N6.00, Legend Internet crumbled by 7.56 per cent to N5.50, Cornerstone Insurance crashed by 6.48 per cent to N6.35, C&I Leasing contracted by 6.29 per cent to N8.20, and Austin Laz slipped by 5.78 per cent to N3.75.
Yesterday, 539.9 million shares valued at N16.7 billion were transacted in 48,023 deals versus the 1.0 billion shares worth N31.6 billion executed in 51,227 deals in the preceding day, implying a shrink in the trading volume, value, and number of deals by 46.01 per cent, 47.15 per cent, and 6.26 per cent apiece.
Zenith Bank was the most active for the day with 54.6 million stocks sold for N3.8 billion, Jaiz Bank traded 41.5 million units worth N359.4 million, Secure Electronic Technology transacted 37.7 million units valued at N39.2 million, Access Holdings exchanged 30.5 million units for N699.2 million, and Lasaco Assurance transacted 27.2 million units worth N68.3 million.
When the market closed for the day, the All-Share Index (ASI) went up by 72.21 points to 166,129.50 points from 166,057.29 points and the market capitalisation gained N31 billion to N106.354 trillion from N106.323 trillion.
By Adedapo Adesanya
It was a positive ending for the Naira this week after it further appreciated against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, January 16 by N1.33 or 0.09 per cent to sell for N1,417.95/$1 compared with the previous day’s N1,419.28/$1.
The domestic currency also gained N2.41 against the Euro in the official market to close at N1,647.51/€1 versus the preceding session’s closing price of N1,649.92/€1, however, it suffered a N7.97 loss against the Pound Sterling in the same market window to trade at N1,901.32/£1, in contrast to Thursday’s closing price of N1,893.35/£1.
In the same vein, the Nigerian Naira depleted against the Dollar at the GTBank FX counter by N2 to quote at N1,427/$1 compared with the previous day’s N1,425/$1, but strengthened against the greenback at the black market yesterday by N5 to settle at N1,485/$1 versus the N1,490/$1 it was exchanged a day earlier.
Improved supply conditions helped keep the market within range as exporters’ and importers’ inflows in addition to non-bank corporate supply enhanced liquidity as the Central Bank of Nigeria (CBN) made no visible intervention.
Stronger external inflows from foreign portfolio investors (FPIs) and improving current account dynamics, continue to align with structural support in the wider economy.
Nigeria has seen projections of a stronger economic or gross domestic product (GDP) growth and lower inflation in 2026, with these forecasts citing improved macroeconomic fundamentals and reform impacts.
As for the cryptocurrency market, it was mixed following selloff in precious metals and lower US stocks appeared to be denting crypto sentiment.
Gold and silver, both of which also enjoyed big rallies earlier this week, tumbled 1.2 per cent and 5 per cent, respectively while key US stock indexes — the Nasdaq, S&P 500 and Dow Jones Industrial Average — all reversed from early gains to modest losses in Friday trade.
Dogecoin (DOGE) shrank by 2.2 per cent to $0.1370, Ripple (XRP) slipped by 0.8 per cent to $2.05, Ethereum (ETH) went down by 0.7 per cent to $3,228.56, and Bitcoin (BTC) slumped by 0.6 per cent to $95,086.80.
Conversely, Litecoin (LTC) appreciated by 3.2 per cent to $74.48, Solana (SOL) rose by 0.4 per cent to $143.70, Cardano (ADA) jumped by 0.2 per cent to $0.3942, and Binance Coin (BNB) increased by 0.1 per cent to $935.88, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
Oil prices settled higher amid lingering worries about a possible US military strike against Iran, a decision that may still occur over the weekend.
Brent crude settled at $64.13 a barrel after going up by 37 cents or 0.58 per cent and the US West Texas Intermediate (WTI) crude finished at $59.44 a barrel after it gained 25 cents or 0.42 per cent.
The US Navy’s aircraft carrier USS Abraham Lincoln was expected to arrive in the Persian Gulf next week after operating in the South China Sea.
Market analysts noted that it doesn’t seem likely anything will happen soon. However, the weekends have become the perfect time for actions so as not offset the markets.
The market had risen after protests flared up in Iran and US President Donald Trump signalled the potential for military strikes, but lost over 4 per cent on Thursday as the American president said Iran’s crackdown on the protesters was easing, allaying concerns of possible military action that could disrupt oil supplies.
Iran produces approximately 3.2 million barrels per day, accounting for roughly 4 per cent of global crude production, so it was not a coincidence that markets rallied sharply through Tuesday and Wednesday as President Trump canceled meetings with Iranian officials and posted that “help is on its way” to Iranian protesters, raising fears of potential US military strikes that sent prices surging toward multi-month highs.
Weighing against those fears are potential supply increases from Venezuela.
The Trump administration is exploring plans to swap heavy Venezuelan crude for US medium sour barrels that can actually go straight into Strategic Petroleum Reserve (SPR) caverns, since not all all oil belongs in the reserve.
According to Reuters, the Department of Energy is considering moving Venezuelan heavy crude into commercial storage at the Louisiana Offshore Oil Port, while US producers deliver medium sour crude into the SPR in exchange.
Analysts expect higher supply this year, potentially creating a ceiling for the geopolitical risk premium on prices.
Some investors covered short positions ahead of the three-day Martin Luther King holiday weekend in the US.
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