FBN Holdings shares rose 8.05 percent week-to-date (WTD), closing the week ending January 10, 2025, in the green, despite an ongoing loan dispute with General Hydrocarbons Limited (GHL).
A leaked letter to Central Bank Governor, Yemi Cardoso revealed that the dispute stems from a loan transaction made during Oba Otudeko’s tenure at FBN Holdings.
The deal was meant to use profits from Oil Mining License (OML) 120 to reduce First Bank’s non-performing loans and avoid hefty provisions in 2021, but GHL claims the bank has failed to deliver on its commitments.
Adding to the tension, First Bank froze $225.8 million of GHL’s funds across banks, a move GHL says violates an earlier court order.
Despite the ongoing legal battles, FBN Holdings shares still recorded a 8.05 percent gain, closing at N30.20 on Friday, the second week of January 2025 as against an opening price of N27.95 per share on Monday.
Also last week, there was a call for an Extraordinary General Meeting (EGM) by two of the company’s shareholders.
A report had indicated that a group of shareholders of the company, with 10 per cent shares, requested the company to call an EGM under section 215 (1) of CAMA in which case they have 21 days to call the meeting.
Top on the agenda of the shareholders of the proposed meeting was for the removal of FBN Chairman, Mr. Femi Otedola and a non-executive/Deputy Chief Executive of Geregu Power Plc, Mr. Julius Omodayo-Owotuga.
However, in a response, the company secretary, Adewale Arogundade, in a signed statement posted on NGX stated that “This matter does not in any way impact the operations of the Company; and all the businesses within the Group continue to provide uninterrupted services to its customers.
He added: “We assure our valued customers, shareholders, investors, other stakeholders and the general public that we are taking all necessary steps to protect the interests of the Company and its subsidiaries.
“The Group’s performance continues to improve, resulting in a higher market capitalisation even as we work towards surpassing the regulatory minimum capital well ahead of the deadline.
FBN Holdings began 2024 at a share price of N23.55, experiencing a strong bullish run in the first quarter that peaked at N35.55 in March.
However, the momentum slowed in April 2024, as uncertainty over the Central Bank of Nigeria’s recapitalization mandate pushed the stock down to N23.90, despite a trading volume of 218 million shares.
By July, the bearish sentiment deepened, sending the price to a low of N20.95.
However, the stock began a gradual recovery in August, climbing steadily to close at N28.05 in December, delivering a year-to-date gain of 19 percent.
This upward trend has trickled into January 2025, with the stock reaching N30 and closing at N30.20 on January 10, backed by a strong monthly trading volume of 272 million shares.
On December 30, 2024, the Federal High Court in Lagos issued a Mareva injunction freezing $225.8 million in assets belonging to General Hydrocarbons Limited (GHL) over a loan dispute with First Bank of Nigeria (FBN).
The injunction comes as GHL pursues arbitration proceedings against FBN, accusing the bank of breaching their partnership agreement.
GHL’s legal team has called the injunction unlawful and announced plans to challenge it in court.
They also claim an earlier court ruling prevents FBN from acting against GHL’s OML operations or related loan transactions.
Meanwhile, the legal tussle continues to delay critical oil exploration and development activities under OML 120.
It was gathered that mediators working to resolve the dispute have suggested a major restructuring of GHL’s leadership, including the appointment of new Chief Executive Officers (CEOs) and Chief Financial Officers (CFOs).
Despite these efforts, both parties remain divided on the proposed terms, further stalling the resolution process.
FBN is also said to have proposed appointing an Independent Asset Manager under a new Framework Agreement as part of the mediation process.
GHL has strongly opposed this idea, viewing it as an attempt by FBN to seize control of its assets, including OML 120, and to replace its management and operations.
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