Nova Merchant Bank has asked the Federal High Court in Lagos to wind up Midwestern Oil and Gas for failing to liquidate an alleged N1,648,649,286.68 debt.
The bank made the prayer in a pettion in suit FHC/L/CP/2641/2023 filed on December 19 by its lawyer, Oluwakemi Balogun. The bank also filed a motion on notice seeking leave to advertise the petition in Federal Government Official Gazette, a national newspaper and others circulating in Lagos State. Nova said the “respondent is insolvent and unable to pay its debt or meet its obligations.”
It prayed that “the respondent, Midwestern Oil & Gas Company Limited, be wound up by the court under the provision of the Companies and Allied Matters Act 2020 for its inability to pay its debt … N1,648,649,286.68.”
The petition noted Nova Merchant Bank by an offer letter of July 26, 2021, granted a N3 billion credit facility to Energy Link Infrastructure for a project Energy Link Infrastructure was undertaking for OML 18 (owned and operated by Eroton E &P).
The securities for the facility were an “Irrevocable Domiciliation of $2 million proceeds from exclusivity agreement with Shell Western Supply & Trading Limited” and “Corporate Guarantee of Eroton Exploration & Production Company Limited.”
It said Energy Link failed to offset the loan repayment at its first maturity date (October 25, 2021) and asked the bank for an extension. The petitioner extended the credit facility by another offer letter, dated January 5, 2022.
The respondent covenanted its Corporate Guarantee dated January 5, 2022, as security for the credit facility granted to Energy Link, which covered the N3 billion.
The facility was tenured for 180 days with 60 days of loan repayment and an interest rate of 18 per cent per annum.
Again, due to inability of Energy Link Infrastructure to repay and upon an application by them, the petitioner by an offer letter of August 16, 2023, restructured the credit facility.
It said Energy Link again failed to pay. The bank hired a solicitor, whose fee is 15 per cent of the sum as of November 28, 2023, at N215, 041, 211.306.
This brought the respondent’s total indebtedness to N1,648,649,286.68 as of when the suit was instituted.
“The failure of the respondent to pay the petitioner the sum owed has caused great financial hardship on the petitioner.”
Our reporter could not reach the firm for its response as the number on its website was unreachable.
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