RT Briscoe an authorized dealer of Toyota Motors and industrial equipment such as forklifts, generators, and compressors, has disclosed that it defaulted on loan facilities with seven banks in its most recent financial statement.
A line item listed as bank overdrafts in the firm’s financial statement equivalent to N15.7 billion was converted to overdrafts by the banks following the default, according to the company.
“The company has not been able to repay the bank overdraft and this has led to winding-up cases by the banks and other creditors. There are also issues on penalty charges by the banks,” the firms auditors PFK Professional services said.
There is an on-going winding up petition case between Diamond Bank Plc (now Access Bank) and R.T. Briscoe. Other parties also joined in the winding up proceedings.
Access Bank claims it is owed a total sum of N3,339,393,807.59 (Three Billion, Three Hundred and Thirty-Nine Million, Three Hundred and Ninety-Three Thousand, Eight Hundred and Seven Naira Fifty-Nine Kobo) by the Company.
Further to the above, other parties including United Bank for Africa, Guaranty Trust Bank, Polaris (Skye) Bank, First Bank, FSDH Merchant Bank and Federal Inland Revenue Service applied to the court as interested parties, alleging to be creditors to the Company for various amounts which are being disputed by the Company.
Guaranty Trust Bank Plc (‘GTBank) seeks to recover principally the sum of N185,274,562.54 (One Hundred and Eighty-Five Million, Two hundred and Seventy-Four Thousand, Five Hundred and Sixty-Two Naira, Fifty-Four Kobo) from R.T. Briscoe Nigeria Limited.
In response, the Company has filed a complete Defence against the claim along with a counterclaim against GTBank to recover from GTBank the sum of N3,096,943,226.00 (Three Billion, Ninety-Six Million, Nine Hundred and Forty-Three Thousand, Two Hundred and Twenty-Six Naira). The case is scheduled for management conference.
The loan default comes as trade and other receivables jumped by 165 percent to N2.5 billion in 2019 (equivalent to 31% of total assets), casting doubt on the firm’s liquidity.
Asset Management Corporation of Nigeria (AMCON), having taken over the debts and liabilities of Polaris Bank (one of the creditors banks) had in exercise of its statutory powers also appointed a Receiver for RT Briscoe.
AMCON through its Lawyer, filed an application in the Winding Up petition, praying the court to be joined as a party.
This application was heard by the court on March 19, 2020, and adjourned till April 24, 2020 for ruling on AMCON’s application to be joined as a party and/or judgment on the substantive petition.
But due to the lockdown occasioned by the COVID-19 pandemic, the court could not sit on this date and no new date has been advised by the court.
The Group and Company incurred losses before tax of N1.2 billion for the year ended 31 December 2019 (2018 : N2.2 billion) and as of that date, the Group’s current liabilities exceeded its current assets by N14.8 billion (2018 : N13.4 billion) and the Company by N15.0 billion (2018 : N13.6 billion), while its total liabilities exceeded its total assets by N9.5 billion (2018 : N8.2 billion) and the Company by N9.9 billion (2018 : N8.6 billion).
As a result of the losses incurred over the years, the shareholders’ fund has been totally eroded to the tune of N9.4 billion and N9.9 billion deficit as at 31 December 2019 for the Group and Company respectively.