Honeywell Group on Monday said it is servicing loan facilities obtained from First Bank of Nigeria Limited and other financial institutions to carry out its operations.
The company, in a statement released in Lagos, said like most companies, it utilises its own equity and borrows from banks and other financial institutions to carry out its operations.
It added that it has a strong track record of mutually beneficial successes with its local and international financiers based on honouring obligations and delivering returns to all stakeholders.
The statement comes amid the shake-up of the bank’s boards by the Central Bank of Nigeria over bad loans among other reasons.
According to the statement, since 1972, Honeywell Group and First Bank of Nigeria have had a professional business relationship that preceded its investment in the bank over a decade later.
It said the company’s relationship with First Bank has always been professional, at arm’s length and in accordance with all regulatory and industry practices and norms.
“The credit facilities accessed from First Bank and other banks were granted after due negotiations, with the necessary documentation and in line with regulatory policies and industry standards,” the statement said.
It added that the Honeywell Group has serviced all its credit facilities in line with the terms agreed with First Bank and at no point has any of these facilities been non-performing.
The company said in 2015, First Bank under the directive of the Central Bank of Nigeria (CBN), drew its attention to a 2004 circular (BSD/9/2004) which required that insider related facilities must not exceed 10 percent of paid-up share capital.
It said based on this directive, the Honeywell Group subsequently entered negotiations with the bank to agree an appropriate repayment structure and the final negotiated position was duly approved by the CBN, adding that it is important to note that the facilities have been performing from inception and to-date.
The company said in accordance with agreed terms, its facilities with First Bank are adequately secured with collaterals in place at over 170 percent of forced sales value and 230 percent at open market value.
The statement said in addition to this, First Bank, on the directive of CBN, requested additional security in the form of FBN Holdings Plc shares held by the chairman of Honeywell Group and ex-chairman of FBN Holdings Plc, Oba Otudeko, citing a 2001 circular and this was duly provided through an authorisation to place a lien on the shares.
It said the Honeywell Group has continued to meet all its obligations on its facilities with First Bank according to agreed terms and has reduced its exposure by nearly 30 percent in 2.5 years. The facilities were charged at market rates and the lender continues to earn significant interest therefrom, the statement said.
