Shell Plc and seven Nigerian banks are said to have intensified battle against AITEO Exploration and Production Ltd, an oil firm owned by billionaire, Benedict Peters in bids to recover their loan facilities they extended to the oil company.
According to a report by Financial Posts, the total debt that to the eight companies in relation to a 2015 asset sale has shot up to about $2.6 billion.
In 2015, Aiteo Eastern E&P Co. purchased a pipeline and an operating interest onshore oil blocks for $2.4 billion.
To enable the purchase, Zenith Bank Plc, Fidelity Bank Plc, Guaranty Trust Bank Plc and other local lenders loaned the company $1.5 billion to support the acquisition, while Shell; the seller of the permit provided $504 million in funding.
The parties have been locked in a legal dispute since late 2019 when the creditors notified Aiteo that it was in default.
The lenders’ position is that Aiteo’s outstanding debt has climbed to about $2.6 billion once interest, fees and penalties are included, inside sources disclosed.
The figure stood at $1.7 billion at the end of 2021 and $910 million a year earlier, according to statements made by the creditors in court and arbitration filings.
These loans “represent significant credits on the books” of the exposed organizations, the Lagos-headquartered Africa Finance Corp., which administers the financial agreement between Aiteo and the banks, said in written evidence to an English court last year. “A default under the loans would be a very serious matter.”
In a court filing in 2019, Aiteo mentioned that it had already repaid a staggering amount of $1.2 billion and denied being in default, however, the company refused to publicly comment on the issue. Shell and the other lenders either declined to comment or didn’t respond to emailed questions.
