Zenith, Access Bank, 8 others restructure Oando’s N108.3bn loan

Zenith Bank, Access Bank and eight commercial banks in the country have joined forces to restructure N108.3 Oando Plc medium-term-loan, making the overall commitment increasing to N115.3bn.

The other affected banks are: Ecobank Nigeria Limited, Fidelity Bank PLC, First Bank of Nigeria Limited, Keystone Bank Limited, Stanbic IBTC Bank PLC, Union Bank of Nigeria PLC, First City Monument Bank Ltd and United Bank for Africa PLC.

The restructuring aims to re-sculpt the repayment profile, extend the loan’s maturity date, and update associated security details.

This was contained in the company’s recently 2021 audited accounts under the notes to accounts.

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A deed of amendment and restatement was signed on November 24, 2020, involving Oando PLC, referred to as the “Borrower”; and its subsidiaries Oando Netherlands Holdings 2 Cooperatieuf, Oando Trading DMCC, and Oando Trading Limited, Bermuda, collectively known as the “Guarantors.” The consortium of Nigerian banks participating as the “Lenders” include:

In addition, FBNQUEST Merchant Bank Limited acted as the “Modelling Bank,” and Stanbic IBTC Trustees Limited functioned as the “Facility Agent” for the deal.

The restructuring comes in the wake of foreign exchange rate fluctuations, notably between the United States Dollar and the Naira.

This led to an upsize in the total commitment from the original N108.3 billion to the revised N115.3 billion.

The repayment terms have been modified to better suit Oando Plc financial situation.

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Extending the Maturity Date: The due date for the completion of the loan repayment has been pushed back, providing Oando PLC with more time to stabilize its operations.

As part of this amendment, the Lenders have agreed to waive Oando Plc existing Events of Default (EoD) as of the effective date of the restructuring.

Stanbic IBTC Trustees Limited, acting as the Facility Agent, communicated that the Lenders have approved the extension of the principal moratorium period to 18 months effective April 27, 2023.

This extension is pivotal in restructuring the facility, serving as an effective remedy for the events leading to the default.

The cooperative action by the consortium of Nigerian banks signifies a strong commitment to fortifying the country’s energy sector.

As Oando PLC is a key player in this industry, its financial stability is of significant national interest. The restructuring will potentially have positive ripple effects on the energy sector and the broader Nigerian economy.