Honeywell Group says its credit facilities with First Bank has been performing
Honeywell Group has stated that it has been servicing credit facilities obtained from First Bank of Nigeria in line with the terms agreed with the bank and at no point have any of these facilities been non-performing.
Recall that the Central Bank of Nigeria (CBN) directed Honeywell to fully repay its obligations to First Bank within 48 hours, warning that failure to do so would cause the CBN to take regulatory measures against the insider borrower and the bank.
According to the statement by the Honeywell Group, the relationship with First Bank has always been professional, at arm’s length, and in accordance with all regulatory and industry practices and norms.
It also said the credit facilities accessed from First Bank and other banks were granted after due negotiations, with the necessary documentation, and in line with regulatory policies and industry standards.
It stated, “In 2015, First Bank under the directive of the Central Bank of Nigeria, drew our attention to a 2004 circular (BSD/9/2004) which requires that insider related facilities must not exceed 10% of paid-up share capital.
Based on this directive we subsequently entered negotiations with the bank to agree on an appropriate repayment structure and the final negotiated position was duly approved by the CBN.
The Group further explained that following agreed terms, its facilities are adequately secured with First Bank with collaterals in place at over 170% of forced sales value and 230% at open market value.
In addition to the above, First Bank, on the directive of CBN, requested additional security in the form of FBN Holdings Plc shares held by the Chairman of Honeywell Group, Dr Oba Otudeko citing a 2001 circular. This was duly provided through an authorisation to place a lien on the shares.”
Honeywell Group has continued to meet all its obligations on its facilities with the Bank according to agreed terms and has reduced its exposure by nearly 30% in 2.5 years. The facilities were charged at market rates and the Bank continues to earn significant interest therefrom.