The Chairman of Zenon Petroleum and Gas Limited and Forte Oil Plc, Mr. Femi Otedola, has paid up his outstanding debt of N140,999,620,395.80 owed the Asset Management Corporation of Nigeria (AMCON), THISDAY learnt Sunday.

Managing Director/Chief Executive Officer, AMCON, Mr. Mustafa Chike-Obi, who confirmed to THISDAY, revealed that the corporation had reached a settlement with Otedola, and that the AMCON board met last Thursday and approved the transfer of the businessman’s assets as well as an undisclosed sum of cash to AMCON as full and final settlement for his liabilities.

He however declined to disclose the assets that were transferred to AMCON, citing the confidentiality agreement binding the transaction, but explained that a proper valuation was undertaken by a valuer appointed by the corporation to assess Otedola’s economic and landed assets.

The Central Bank of Nigeria (CBN) had in a move aimed at strengthening financial stability and instilling discipline in the banking sector, blacklisted Otedola, Zenon and 112 other companies as well as their principal shareholders and directors where the outstanding value of the loans purchased by AMCON amounted to N5 billion or more from taking further credit from banks, until full liquidation of the agreed indebtedness.

The list had revealed Otedola as the biggest debtor to the corporation from bank loans of N192, 422, 889, 943. 56, which was acquired by AMCON at an agreed price of N140, 999, 620, 395. 80.
The board meeting, Chike-Obi further explained, came on the heels of the Executive Committee (EXCO) and Credit Committee meetings of AMCON, which took place last Monday to consider and approve Otedola’s repayment terms as full and final settlement of the amount owed the corporation.

He added: “This is a positive development as the settlement by the biggest debtor to AMCON showed that there are no sacred cows because even a prominent businessman like Otedola has come out to settle.”

Chike-Obi said reaching this stage with Otedola involved over six months of long-drawn out meetings and negotiations with the businessman during which his assets had to be valued by an independent valuer to ensure that they matched his debts.

However, a reliable source who was abreast of the payment terms, but pleaded to remain anonymous, gave a breakdown of how Otedola accumulated the huge debt, saying that Zenon, after taking a syndicated loan from five banks, was adversely affected by the global economic downturn in 2008.

According to him, Zenon lost N75 billion when oil prices fell from a peak of $147 a barrel, N40 billion through currency devaluation, N25 billion in the capital market, and N50 billion as a result of accrued interest and penalties charged by the banks on the facility.

“Zenon Petroleum has paid AMCON the full and final settlement of its obligations/loans to some Nigerian banks, which was bought over by AMCON in May 2011,” the source said.

He pointed out that Otedola had decided a while ago to let go of his assets and start on a clean slate, adding that the businessman had accumulated a stack of court injunctions against the banks when they went after him for their money.

“So for all parties, this is a way out to get their money and settle all the cases once and for all,” he said.

Also, a CBN official, who confirmed the settlement reached between AMCON and Otedola, described it as a positive development, stating: “Given that he (Otedola) had the highest exposure to the banking system and posed a systemic risk, we are pleased that he has settled his obligations.”

Source: Thisday



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