Contrary to media reports, oil and gas entrepreneur, Dr. Ambrosie Bryant Orjiako, has already paid a total of $143.3 million to Zenith Bank Plc. and an AFREXIM-led consortium of banks in the loan facility to Shebah Exploration and Production (Shebah E&P), which he is the guarantor, it has been reported.
The repaid sum includes the $20 million he paid to the consortium this year.
It is recalled that a Federal High Court sitting in Ikoyi, Lagos, had on November 8, 2021 restrained Shebah Exploration and Production Company Limited (Shebah E&P), Shebah Petroleum Development Company Limited, and Chairman of Seplat Energy Plc., Dr. ABC Orjiako, from withdrawing from the accounts of nine other defendants and 29 banks.
The interim order, which was made by Justice Yellin Bogoro while granting an ex parte Mareva application by Zenith Bank Plc. in the case of an alleged $78.4 million debt to the commercial bank.
However, emerging facts show that contrary to media reports that present the matter as a fresh issue, the matter has been a subject of litigation in London and Nigerian courts dating back to 2014 with Orjiako paying a whooping sum of $143.3 million to the consortiums for the loans he guaranteed.
Further findings also show that contrary to some media reports, which tend to present the loan facilities in issue as personal facility to the oil magnet, Orjiako but only a majority shareholder and guarantor of the loan facilities advanced directly to Shebah to enable the company carry out a drilling campaign in Oil Mining License (OML) 108 located at Ukpokiti oil field, offshore of the Niger Delta, but which became inconclusive.
“Dr. A.B.C Orjiako was merely the majority shareholder of Shebah and guarantor of the facilities in question. He was not even a member of management of Shebah, but only stepped up to salvage the company by making payments to the banks, using his personal and family assets to try to liquidate the loan facilities as a guarantor.
“Contrary claims that Dr. Orjiako is not committed to defraying the said loans, he has actually paid $89.3 million out of a total Principal of $150 million to the consortium of AMCON/AFREXIM/ACCESS.
This payment comprises the sum of $20 million he has already paid this year 2021. As such if his proposal to the consortium of creditors is accepted, the Principal amount would remain $60.7 million only.
“Unfortunately, his proposal to the consortium to accommodate Zenith Bank in the distribution of the repayment have not accepted. Otherwise, the Zenith Bank legal action in October, which resulted in the Mareva injunction, could not have arisen.
“In any case, it is noteworthy that of the principal amount of $70 million owed Zenith Bank by Shebah, Orjiako has paid the sum of $54 million and this includes proceeds of forced sale of his family Seplat shares by Zenith bank.
“So, in total, he has paid a total of $143.3million, comprising $89.3 to the AFREXIM consortium and $54 million to Zenith Bank to defray a loan not personally utilised by him and also for oil assets which are not generating any revenues. How else does one have to show commitment, high moral duty and rectitude?” it was reliably informed.
It was equally gathered that an out-of-court settlement of the commercial dispute could be in the offing to bring the entire legal impasse to a final close.
Meanwhile, findings show that the commercial dispute began in 2012 when Shebah E&P obtained a $150 million loan facility from a consortium of banks made up of AFREXIM, Diamond bank (currently Access Bank), and Skye Bank (now Polaris Bank) for work over and drilling at the Ukpokiti field (OML 108) operated by Shebah E&P.
However, after Shebah drilled a successful horizontal well said to be the first of its kind in the offshore Niger Delta and tested 4,000 barrels per day of oil and condensate production, it encountered large gas reserves.
Consequently, the company needed more funds in order to commercialise the gas to avoid excessive flaring in producing the discovered oil and conclude operation, a need the AFREXIM-led consortium could not provide.
It was at this juncture that Zenith Bank contacted Shebah in 2014, assessed the situation, and with the approval of the bank’s Board availed Shebah a loan of $250 million loan facility to save the situation.
Additionally, Zenith Bank, it was gathered, offered to pay the AFREXIM-led consortium the sum of $50 million to lessen their collective exposure, and also to enhance the loan facility to $350 million as well provide Shebah with additional funds to monetise the gas, and produce the discovered oil.
However, the enhanced facility proposed by Zenith meant that Zenith Bank would not only join, but lead the syndicate with $250 million, wile also reducing the exposure of the existing three-bank consortium to $100 million or approximately $33 million each.
Zenith Bank equally requested a 9-month moratorium in line with Shebah’s need to conclude the projects and increase to five years the facility tenure, which remained approximately two and half years at the time of the offer.
However, the consortium surprisingly turned down Zenith’s offers and went proceeded to file an action to call the facility in 2014, two years after final draw down of the facility, thus triggering the default on the loan.
The consortium equally filed a court action in London wherein Mr Justice Phillips of the London High Court, delivered a judgement in its favour on February 19, 2016 for the repayment of the said $150 million facility.
However, the defendants, opposed its enforcement Shebah at the Federal High Court, Lagos, where the consortium registered and applied for the enforcement of the London judgment.
Shebah instead pushed for a negotiation and an out-of-court settlement to be able to repay the loan under a restructured arrangement.
The case is still life, as the court awaits the outcome on the said settlement, which will now be entered as consent judgement.