N4 Billion Debt: Bank Urges Court To Wind Up Company

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In a bid to recover a debt of N4.2 billion, Diamond Bank has filed a wind up petition against a limited liability construction company, Gitto Construzioni Generali Nigeria Limited.

In the said wind up petition filed before a federal high court in Lagos, southwest Nigeria, by a Lagos lawyer, Barrister Oluwakemi Balogun, on behalf of Diamond Bank. It was averred that between 25 October, 2004 and 25 March, 2010, Gitto Construzioni Generali Nigeria Limited was offered various types of facilities such as overdraft, letter of credit, invoice discounting facilities, Guaranteed commercial papers, revolving bond/guarantee facilities and vehicle lease facility, all amounting to about N8 billion.

The facilities were duly accepted by the company which made a full draw down of same.

The purposes for which the facilities were granted among others are, to enable the company take immediate delivery of 13 units of Toyota vehicles from Elizade Nigeria Limited pending payment and to accommodate the company’s new requests for bonds and guarantees for contracts and projects, finance working capital requirements, especially to meet operational overheads and to establish sight confirm of letter of credit for the importation of heavy duty machinery and equipment such as caterpillars and rolling machines required for the execution of its N6.04 billion contract to construct East-West Lurk Road in Bayelsa.

However, at the expiration of the above facilities, Gitto Company failed to meet up to its obligation to the bank as contained in the offer letters, thereby necessitating the bank to forward several demand letters requesting the company to fulfill its obligations.

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As a result of the company’s inability to fulfil its obligation to the bank, the indebtedness of the company to Diamond bank as at 19 April, 2012, was in the sum of N4,226,970,246.58 and the interests continue to accrue.

Failure of the company to pay the sum owed by it has caused great financial hardship to the bank.

In the circumstance, the bank contended that it is just and equitable that the Gitto Company be wound up. Consequently, the bank prays as follows:

That Gitto Construzioni Generali Nigeria Limited be wound up by the court under the provision of the Company and Allied Matter Act 1990 for its inability to pay the sum of N4,226,970,246.58 being the accumulative debt the company owes the bank.

—Akin Kuponiyi