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Monday, April 22, 2024

Access Bank Takes Over Japaul Assets over Unpaid N37.2 bn loan

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Japaul Oil & Maritime Services Plc, a Nigerian oil-services company has seen its assets forcefully taken over by Access Bank due to accumulated unpaid loans and interests.
Japaul was indebted to the former Diamond Bank (which was acquired by Access), to the tune of N28.43 billion, while it also owed Access Bank the sum of N8.82 billion.
When Access Bank acquired Diamond Bank in 2019, the Diamond facility was further restructured with the accumulated unpaid interest and rolled over at a reviewed rate of 10 percent per annum. The balance was then collapsed to one account at Access Bank Plc.
During the year, the marine equipment’s pledged as collateral securities for various loans obtained by the company from Access Bank were however forcefully taken over to settle all obligations to the bank based on duly executed terms of settlement before the Federal High Court directive on suit no: FHC/L/CS/1222/2018.
Access Bank and Japual agreed to a concede an amount of N30.9 billion as the final settlement of all outstanding liabilities.
This will be settled as follows: The Bank is to take over Dredgers 12 and 13 for N5 billion and the Barge (Beau Geste) for N25.9 billion. This makes up the N30.9 billion.
Japaul is to give up its Land and building for N1.5 billion which the bank will give as piecemeal working capital to facilitate the maintenance of the dredgers. This was treated as a receivable since Japual is yet to receive the money.
The poor financial state of the Nigerian Stock Exchange (NSE) listed Japaul raises the question of how the firm which only had revenues of N725.4 million in 2019, was able to accumulate debts in excess of N30 billion.
The direct costs in earning the revenue was however equivalent to N1.66 billion, swallowing up all of the revenue and leading to a deficit.
Japaul had been making persistent losses over the years and at 31 December 2019, the Group made a gross loss from operation of N943.3 million, while the Company made a loss of N968.6 million, and working capital deficiency of N1.5 billion (2018: N10.8 billion).
Curiously, despite the losses admin expenses were equivalent to N635.8 million, including N63.7 million in Director’s remuneration.
Japaul Chairman Jegede Paul said in 2018 it was expecting a fresh injection of capital from a little known private equity firm Milost Global Inc., for $350 million in shares and loans for business expansion.
Milost was to invest $250 million in equity and another $100 million in convertible loans, that would have enabled the company to fix grounded vessels, finance new contracts and expand into mining, Jegede said.
The loans apparently never materialized, leading to the firm now losing its major assets. Japaul’s stock price has gone nowhere in 5 years and has returned -21 percent in the past year and closed at N0.22 per share yesterday, bucking the trend of Small Cap outperformance in recent times on the NSE.

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