17th February, 2011
In a bid to recover a debt of N1.16 billion, Diamond Bank is set to take over Jos International Breweries Plc and its subsidiary, Pioneer Milling Company Limited.
Meanwhile, the bank has appointed a Lagos lawyer and Notary Public, Mr. Oluwakemi Balogun, as the receiver/manager of the companies.
In order to enforce the total take over and control, the bank has dragged the company, its subsidiary and five of directors namely Albert Kattiems, Musa Garba Izam, Tunde Savage, Bako Arri and Senator Nunu Aboki, before a Federal High Court in Lagos, South West Nigeria.
In an affidavit sworn to by principal officer of Diamond Bank, Uzoamaka Onwuika and filed before the court by Barrister Oluwakemi Balogun, the deponent averred that by offer letter dated 22 February, 2008, Pioneer Milling Company was granted a loan of N500 million to finance the purchase of grains for processing to meet the companyâ€™s contract with Guinness Nigeria Plc as well as meet is raw material requirements.
By the same offer letter, the bank also extended earlier granted but unpaid loan of N60,545,223.71 to a high repayment with the companyâ€™s cash flow patterns.
The N500 million term loan was for a tenure of 12 months while the restructured N60,645,223.71 facility was for a period of 18 months.
The facilities were secured with the following: (a) mortgage debenture on the lands, buildings, plant equipment and machinery of Jos International Breweries Plc; (b) deed of legal mortgage on four developed properties located at 1, Breweries Road, Jos; (c) legal mortgage on the properties in Jos covered by Certificate of Occupancy; (d) letters of domiciliation from Guinness and other employers.
The facilities were duly accepted and fully utilised but contrary to the terms of the offer, the company failed to liquidate its indebtedness in four equal instalments in the sum of N125 million with accrued interest despite several letters of demand.
In the same vein, Jos International Breweries, on 22 February, 2008, was granted an overdraft facility in the sum of N100 million to finance the increase in its working investment needs and other operating expenses.
The bank, by the said letter of offer, extended earlier granted but unpaid term loan of N142,647,914. 31 to a high repayment with the Jos International Breweriesâ€™ cash flow patterns.
The facilities were duly accepted and fully utilised but the company has wilfully neglected to liquidate its indebtedness despite the bankâ€™s several letters of demand.
The facilities granted to the two companies which were consolidated by the Boardâ€™s resolution of 29 September, 2005, have since expired and are meant to be paid but remained unpaid till date.
The defendantâ€™s indebtedness to the bank now stands at N1,168,925,150.07.
Upon the above and in accordance with the provisions of the deed of third party mortgage debenture dated 15 October, 2010 executed by the two companies in favour of Diamond Bank, the bank duly appointed Mr. Kemi Balogun as the receiver/manager in respect of the assets of Jos International Breweries to realise the debt owed by the two companies.
The deponent contended that the two companies, Jos International Breweries Plc and Pioneer Milling Company Limited, are insolvent, unprofitable and cannot repay the debts unless their charged assets are realised.
Consequently, the bank is urging the court to restrain the directors of the companies and their agents from interfering with, obstructing or disturbing the receiver/manager from exercising the power vested in him in performing his duties over the assets of the two companies.