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Seplat Says It’s Not Indebted to Access Bank

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Oil company Seplat says that it is not indebted to tier-one lender Access Bank PLC. Policemen had sealed off the head office of Seplat Petroleum Development Company PLC at 16A Temple Road, Ikoyi, Lagos was sealed on December 2, 2020, acting on behalf Kunle Ogunba, a Receiver/Manager appointed by the bank. Company sources said that the sealing order prevented the company’s staff and other tenants from accessing the building.

Inside sources said that Seplat had received certified copies of legal documents including a letter dated December 2, 2020 from Messrs Kunle Ogunba & Associates, stating that they had been appointed as the Receiver/Manager of the building; Court documents filed by Access Bank against Seplat, Cardinal Drilling and other defendants.

Seplat’s offices were believed to have been sealed within the week in line with an ex parte Court Order dated November 13 2020, which was obtained in favour of Access Bank Plc in connection with a Loan Facility the bank granted to Cardinal Drilling Services Limited.

The Lagos Times understands that in 2012, Cardinal Drilling Services Limited obtained a Facility from Diamond Bank (now Access Bank) to purchase the CDS Rigs 101, 201, 202, and 203. The Facility was secured by a fixed and floating Debenture over Cardinal’s assets.

However, Seplat executives said that the company was not a party to the facility or the debenture and did not provide any guarantees or indemnities on behalf of Cardinal or otherwise in connection with the facility.

The company admitted that Cardinal Rigs were used to provide drilling services to Seplat and other companies. CDS 101 and 201 were used to execute SEPLAT’s 2019 work programme and all 4 Rigs were critical to Seplat’s future drilling plans.

Cardinal and Access Bank had on the 15th January 2019, agreed on a settlement of $45 Million, to be paid in two (2) installments by 31st December 2019 after the oil services company was unable to service the outstanding part of the loan, which Access Bank showed to be an outstanding debt of US$85.8m.

When Cardinal failed to pay the first tranche of the agreed settlement amount of $30 Million on the April 25 2019, which had been due on or before the April 18, 2019, the bank set in motion a process to legally recover the debts from Cardinal.Nigerian Oil Group Seplat says that it is not indebted to tier-1 lender Access Bank. The London-listed oil firm said that given the importance of Cardinal’s rigs to Seplat’s drilling operations, Seplat had supported Cardinal in its efforts to resolve its debt dispute with Access Bank and prevent a foreclosure of the company’s rigs by the bank.

However, Seplat’s leadership say that they did not make any binding commitment to Access Bank with respect to the rigs. Seplat says it had only sought to support settlement discussions between Cardinal and Access Bank, in order to to retain its continued use of the Cardinal Rigs, which was primarily a vertical supply chain protection strategy.

Following Cardinal’s increasing indebtedness and failure to pay the agreed settlement, Access Bank joined Seplat in its remedial action strategy to recover its loan from Cardinal. Cardinal, in its response to Access Bank, had said that it was in discussions with Seplat on possible funding support.

Clause 6 of the Deed of Debenture on the loan facility granted to Cardinal allowed Access Bank the right to appoint a Receiver/Manager over the company’s assets if Cardinal failed to liquidate the Facility. On 12th October 2020, Access Bank appointed Kunle Ogunba & Associates to act as the Receiver/Manager.

On November 13, 2020, Access Bank filed a Court action against Seplat; Cardinal; a director of Seplat; and a director of Cardinal. According to court proceedings, Access Bank asked the Court grant the following prayers: validate the appointment of Kunle Ogunba & Associates as the Receiver/Manager; validate the Receiver/Manager’s authority to take possession of the 4 Cardinal Rigs and other assets of persons and companies presumably connected to Cardinal drilling; restrain all Defendants from disposing or dealing with the Assets; declare that the Defendants have no right to enter into, or deal with, any of the Assets.

The Lagos Times understands that Cardinal Drilling is a local subsidiary of Cardinal Drilling SAS, a unit of Maurel and Prom, a France-based transnational company. The company’s website lists six directors including Kalu Nwosu, a former Shell executive who spent twenty-eight years at Shell before branching out on his own. Immediately after leaving Shell, he became Managing Director of Brittania-U Nigeria Limited (a Marginal field E & P Company) from 09/2007 to 03/2010, taking the Company, to “first oil” within 2-years from start.

The other directors are Gregory Omosigho Ero, a former NNPC Management member, Greg Ero and chairman of Arkleen Oil and Gas Company; Godwin Omene: A former Deputy Managing Director of SPDC-Nigeria and former Managing Director of the Niger Delta Development Company (NDDC), Christine Nwuche, Comfort Uhegbu, Jean-Francios Henin, President of Maurel & Prom, Paris, France, the parent Company of Cardinal Drilling SAS, France.

Seplat’s spokeseperson Chioma Nwachuku did not respond to repeated requests for comment.

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