Aiteo owes Shell, banks $1.7bn – Report – TrendyNewsReporters
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Aiteo owes Shell, banks $1.7bn – Report

AITEO Eastern E&P owes Shell Plc and seven banks $1.7bn and the loan may affect the Nigerian financial system if unpaid, according to the affected banks.

According to a Bloomberg report, Aiteo Eastern E&P Co. purchased a pipeline and an operating interest in one of the nation’s most priced onshore oil blocks seven years ago for $2.4bn.

Zenith Bank Plc, Fidelity Bank Plc, Guaranty Trust Bank Plc and other Nigerian lenders loaned the company $1.5bn to support the acquisition, while Shell – the seller of the assets – provided $504m in financing.

The parties had been locked in a tangled legal dispute since October 2019 when the creditors notified Aiteo that it was in default.

The lenders claimed the debt owed climbed to $1.7bn by the end of last year, from less than $300m in late 2019, according to a ruling by the English commercial court on April 1.

The financiers said the increase in the loan amount was due to missed repayments, unpaid interest, and default penalties. The financiers had said this before an arbitration case against Aiteo in late 2020, when the amount stood at $910m.

Those loans are ‘Systematically important’ within the Nigerian banking system and ‘represent significant credits on the books’ of the exposed institutions, the Lagos-headquartered Africa Finance Corporation said in written evidence to the court, according to the judgment.

“A default under the loans would be a very serious matter” for the involved banks, said AFC, which administers the financial agreement between Aiteo and the bank creditors.

The UK court earlier this month made permanent an injunction obtained by the lenders and AFC in late 2020 that instructed the oil firm it was contractually required to stop challenging the debt claim in Nigerian courts and to resolve any disputes before an arbitration tribunal in London.

Daniel

Graphic Designer/ Content Writer

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