FirstBank clarifies its position on a commercial dispute with General Hydrocarbons Limited, stressing the importance of governance and transparency.
First Bank of Nigeria Limited (FirstBank) has issued a response to recent media reports regarding its ongoing commercial transaction with General Hydrocarbons Limited (GHL), which is currently under litigation.
Also read: FirstBank targets expansion in Ethiopia, Angola, and Cameroon
In line with its respect for the legal process, FirstBank has refrained from commenting on the matter’s specifics, as it is sub-judice, but has provided clarifications to correct what it described as false narratives presented in the media.
The transaction in question involves FirstBank as the lender and GHL as the borrower, with FirstBank providing several credit facilities for the development of Oil Mining Lease assets.
These facilities are secured by robust loan agreements clearly defining the obligations and security arrangements for both parties.
The dispute arose after FirstBank noticed breaches in the agreement by GHL, including the diversion of proceeds from the financed assets.
In response, FirstBank requested the appointment of an independent operator, mutually agreeable to both parties, to manage the project transparently and protect the interests of all stakeholders.
GHL rejected this request and insisted on receiving additional funding from the bank, despite not fulfilling the terms for additional financial support.
Rather than complying with the terms set out by FirstBank for accessing more funding, GHL initiated arbitration proceedings.
The bank further clarified that GHL’s action in the Federal High Court was only to seek preservative orders pending arbitration, while FirstBank had filed a substantive claim against GHL regarding subsequent credit facilities, which were to be resolved through the courts, not arbitration.
FirstBank’s claim is separate from GHL’s arbitration request, as it pertains to the terms of the subsequent credit facilities, which include clear provisions for court resolution.
The bank emphasized that it had no choice but to pursue legal action after GHL diverted crude oil proceeds from a Floating Production Storage and Offloading (FPSO) vessel, breaching the loan agreement.
As a secured lender, FirstBank’s actions were necessary to preserve assets, recover diverted proceeds, and protect its interests.
The bank also reiterated its commitment to upholding the rule of law and maintaining a strong credit culture in Nigeria, where borrowers are expected to meet their financial obligations.
Despite the ongoing dispute, FirstBank assured its customers, stakeholders, and the general public that it remains solid, calm, and steadfast in its commitment to providing first-class financial services.
The bank also expressed gratitude to its shareholders for their overwhelming support during its recent rights issue and looks forward to a successful continuation of its capital raise exercise.
In conclusion, FirstBank reiterated its long-standing history of supporting legitimate business aspirations and remains dedicated to ensuring that borrowers honour their repayment obligations.
