UBA Plc has filed a winding up petition against Sahara Energy Resource Limited (Sahara Energy) at a federal high court in Lagos.
The petition was based on a N15 billion loan owed by KEPCO Energy Resources Limited (KEPCO).
Sahara Energy had stood as a guarantor to KEPCO.
A winding up petition is a legal action taken by a creditor or creditors against an insolvent company that owes them money.
It can also be filed against a company or companies who have served as guarantors of the defaulter, and if approved by the court, will lead to a closure of or compulsory liquidation of all the debtors assets to repay the loan.
The petition was filed before Mohammed Liman, a judge of the high court, by Temilolu Adamolekun, UBA’s legal counsel.
The bank said KEPCO had through a loan, raised capital to fund the acquisition of Egbin Power Plant, operated by Sahara Power Group, a privately-owned power company under the Sahara conglomerate.
How the ‘N15 billion debt’ came about
In 2013, the federal government granted KEPCO, a Korean company 70% stake of Egbin power plant at a sale value of $407.3 million, which was equivalent to N64.35 billion at the existing exchange rate.
In order to fund that acquisition, the petitioner said KEPCO had applied for a credit facility from several banks, including UBA, with Sahara Energy standing in as a “corporate guarantor” to secure the loan.
FBN Capital Limited and First Nigeria Limited were appointed as the facility agent and security trustee respectively.
UBA had therefore granted KEPCO a loan to the tune of $35 million in August 2013.
The petitioner said KEPCO failed to meet its obligations even after restructuring the loan on two different occasions.
The interest on the rescheduled debt is said to have increased the facility to $42,282,430.49 or NN15,221,674,976.40 as of December 31, 2018.
The petitioner said Sahara Energy had been notified several times to fulfill its obligation as a guarantor but had not done so, hence the the need to file a winding up order.
“The company herein is insolvent and unable to pay its debt. In the circumstances, it is just and equitable that the company should be wound up,” the petition read.
The petitioner also sought “an order that the company, Sahara Energy Resources Ltd, be wound up by the court under the provisions of Companies and Allied Matters Act.”
Following an ex-parte motion filed by Adamolekun, the bank’s lawyer, Liman ordered that the winding up petition be advertised in the federal government’s official gazzette and a national daily newspaper.
But Sahara Group has denied being indebted to UBA, saying it neither has outstanding facilities with the bank nor did it borrow any money from UBA.
The firm added that it did not grant a direct guarantee to UBA on any loan transaction that UBA could unilaterally enforce or sue on.
“Our lawyers have been duly instructed and have taken all necessary steps to ensure that the order is discharged or set aside as soon as practicable,” Sahara Group said in a statement.
“Sahara Energy Limited (SERL) and the entire Sahara Group will vigorously pursue and defend UBA’s petition to its logical conclusion with a view to dismissing the petition.
“SERL will provide periodic updates to its esteemed clients, suppliers and bankers as may be necessary, of steps being taken in connection with the suits and the results of effort to set aside the order and strike out the suit.”
The hearing of UBA’s petition has been adjourned till April 30.
Buhari govt insists on VAT increment, gives reason
Mrs. Zainab Ahmed, the Minister of Finance, Budget and National Planning, has insisted that Value Added Tax (VAT) has to increase.
She said this while noting that the nation will not be able to reach 80 per cent revenue performance for 2019.
Ahmed at the public presentation of the 2020 budget proposals, said that as at half year, the actual aggregate revenue for 2019 was N2.04 trillion, which was 58 per cent of the prorate target.
Ahmed said of the figure, oil revenue accounted for N900 billion, Company Income Tax (CIT) N349.11 billion, Value Added Tax (VAT) N81.36 billion and Customs Collections N184.10 billion.
“As to whether we will reach the N8.33 trillion at the end of 2019 is very unlikely and that is why we have to make special efforts to boost revenue performance”, NAN quoted her as saying.
“It is clear that we can not reach even 80 per cent and that is why we have to do several things to make sure that revenue performance is enhanced.
“Releases did not start until late July and as at last week we had scheduled and releases are now up to N650 billion.”
According to her, N294.63 billion was released for capital expenditure as at the end of September, but the target is to be able to reach N900 billion by the end of December 2019.
Ahmed said that of the total appropriation of N8.92 trillion, N3.39 trillion had been spent by June 30, as against the prorated expenditure budget of N4.58 trillion, representing 76 per cent performance.
The News Agency of Nigeria (NAN) reports that the 2019 Appropriation Bill was presented to the National Assembly by President Muhammadu Buhari on Dec. 19, 2018, but was signed into law on May 27, 2019.
The N8.92 trillion budget had a revenue projection of N6.97 trillion, consisting of oil revenue projected at N3.73 trillion while non-oil revenue was estimated at N1.39 trillion.
Estimates for non-oil revenue consisted of N799.52 billion from CIT, N229.34 billion from VAT and Customs Duties of N302.55 billion.
The 2019 budget was predicated on oil production of 2.3 million barrels per day at 60 dollars per barrel and an exchange rate of N305 per dollar.
On the issue of border closure, she said only the main borders that were manned by the Nigerian Customs Service (NCS) and other security operatives were closed.
She added that the nation had seen the benefits of the closure and that though there were some challenges, the NCS and the committee working on the borders closure was looking at how to ease some of the difficulties.
“It has to be Nigeria first and we have to protect our own industries because some of our neighbours have been flagrantly abusing commitments that we jointly signed to and the President has said this is no longer acceptable.
“The border closure is not forever, there will be an end date, the Federal Government is currently in discussion with governments of our neighbouring countries Niger and Benin Republic.
“We are negotiating to make sure that the challenges that led to the closure of the borders are addressed on both sides but, especially that our neighbors meet the commitments that we signed unto several years ago.
“Once those discussions are concluded, the borders will be opened again,” she said.
Fuel subsidy to gulp N450bn in 2020
Zainab Ahmed, minister of finance, budget and national planning, says under-recovery, also known as subsidy, on petrol will be N450 billion in 2020.
She said this at the public presentation of the 2020 budget proposals in Abuja on Monday.
Ahmed said it was called “under-recovery” because it was the cost of operation of the Nigerian National Petroleum Corporation (NNPC).
“We have a provision for under-recovery of PMS in the sum of N450 billion. If you look at the budget office website, it is in the fiscal framework, which is an annexure to the budget,” she said.
President Muhammadu Buhari had on Tuesday, presented a budget proposal of N10.33 trillion to a joint session of the national assembly.
He put the federal government’s estimated revenue in 2020 at N8.155 trillion, comprising oil revenue of N2.64 trillion, non-oil tax revenues of N1.81 trillion and other revenue of N3.7 trillion.
Other estimates are N556.7 billion for statutory transfers, N2.45 trillion for debt servicing and provision of N296 billion as sinking fund.
The 2020 budget is based on an oil production estimate of 2.18 million barrels per day, oil price benchmark of 57 dollars per barrel and an exchange rate of N305 to a dollar.
Ahmed said that recurrent (non-debt) spending was expected to rise by 11.28 per cent, from N4.39 trillion in 2019 to N4.88 trillion in 2020.
This, she said, would reflect in salaries and pensions, including provisions for implementation of the new minimum wage.
Ahmed said the overall budget deficit of N2.17 trillion represents 1.52 per cent of the gross domestic product (GDP) and N1.64 trillion of it would be funded by both domestic and external borrowing.
According to her, the external sources will provide N850 billion, while domestic sources will provide N744.99 billion.
Citing the top 12 ministries, departments and agencies (MDAs) capital allocations, she said the ministry of works and housing was allocated N259.2 billion, power N127.67 billion, transportation N123.07 billion, education (including Universal Basic Education Commission) N162.74 billion.
Others are defence N99.87 billion, health N90.98 billion, agriculture and rural development, N79.79 billion and water resources, N78.34 billion.
Humanitarian affairs, disaster management and social development, N45.45 billion, aviation, N53.85 billion, industry, trade and investment, N41.34 billion and science and technology, N37.55 billion.
She, however, said that there were key expenditures captured in the medium term expenditure framework (MTEF), but were not in the 2020 budget.
“They are N61 billion for the Presidential Power Initiative, N1.22 trillion for federally funded projects in the oil and gas sector to be undertaken by NNPC on behalf of the federation,” she said.
“Others are: N272 billion as transfers to Tertiary Education Trust Fund (TETFUND) for infrastructure projects in tertiary institutions and N82.35 billion as transfer to Nigeria Sovereign Wealth Investment (NSIA) for Public Private Partnership/Presidential Infrastructure Development Fund (PIDF).”
For revenue, Ahmed said there were strategic revenue growth initiatives (SRGI) aimed at boosting revenue generation to meet targeted revenue to GDP ratio of 15 percent.
She added that the SRGI would be implemented with increased vigour to improve revenue collection and expenditure management.
She said Nigeria must mobilise significant resources to invest in human capital development and critical infrastructure.
“Some reforms will be tough but they must be done to look at the facts and be frank to ourselves,” she said.
“However, we will engage the public sector in whatever we do, including any changes in taxes, with regards to rates or administration methods.”
N1.1million ‘Jesus Shoes’ with holy water soles and mini crucifix go viral
A pair of trainers dubbed ‘Jesus Shoes‘ — with holy-water injected soles coupled with a mini crucifix and drop of blood on the tongue to match — have begun to go viral.
The now-trending godly sneakers, which were created by MSCHF (Mischief), a Brooklyn-based creatives, sold out within minutes of being released online on Tuesday, October 8.
The MSCHF rebranded a pair of Nike Air Max 97 sneakers to implement the idea of walking on water with ‘Jesus Shoes’.
Nike was, however, not connected to the project in any way.
The ‘Jesus Shoes’, which are selling for as much as £3,000 (approximately N1.1million), contain holy water from the Jordan river in the bubbled soles, a steel crucifix on top of the laces of the right trainer and a red blob at the tip of each trainer tongue to signify the blood of Christ.
Each pair contains 60 cubic centimeters of liquid.
On the Stockx sneaker trading website the shoes are priced at $3,000-$4,300 a pair.
In addition to the holy water, which was blessed by a priest, there is also the biblical verse ‘Matthew 14:25’ — which accounts the act of Jesus walking on water — referenced on the side of the shoes.
The bottoms of the shoes are also dyed a reddish tint to mimic the shoes worn by popes long ago.
“We thought of that Arizona Iced Tea and Adidas collab, where they were selling shoes that [advertised] a beverage company that sells iced tea at bodegas,” Daniel Greenberg, the company’s head of commerce, told the New York Post.
“So we wanted to make a statement about how absurd collab culture has gotten. We were wondering, what would a collab with Jesus Christ look like?. As a Jew myself, the only thing I knew was that he walked on water.”
The company also disclosed that more of the sneakers will be available from October 22.
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