A World Bank-backed power plant that provides a tenth of Nigeria’s electricity is at risk of a default on its loan payments because of a severe dollar shortage in the continent’s biggest economy, according to three people briefed on the matter, the Financial Times reported. The $900m Azura-Edo Independent Power Plant in Edo state has been unable to source dollars through the Central Bank of Nigeria, which has restricted access to the greenback in an effort to support the local naira currency, according to an industry executive and a financier briefed on the matter.
Aiteo Eastern Exploration and Production is in debt restructuring talks with its lenders, group managing director Victor Okoronkwo tells The Africa Report. All parameters of the company’s debt are under consideration as part of the talks, which began shortly before the COVID-19 pandemic, Okoronkwo said, The Africa Report reported.
Nigerian banks are restructuring 41% of loans in the country after the central bank placed a moratorium on interest charges and principal debt repayments to cushion the blow of lower oil prices and fallout from the coronavirus, Bloomberg News reported. Loans worth 7.8 trillion naira ($20 billion) to 35,640 customers are being reorganized out of 18.9 trillion naira in credit across the industry, Central Bank of Nigeria Governor Godwin Emefiele said on Monday. Twenty-two of the nation’s lenders are involved in the transactions, he said.
Holders of Zambia’s Eurobonds are squaring up for what is likely to be a complex and lengthy debt-restructuring process. A group of lenders owning about a third of the nation’s dollar bonds, and in contact with another third, have formed a committee to negotiate with the government, Bloomberg News reported. Newstate Partners LLP will advise the creditors, who didn’t disclose who they were. Lazard Ltd. is representing Zambia. Zambia is looking to overhaul as much as $11 billion in foreign debt as part of efforts to unlock emergency funding from the International Monetary Fund.
FCMB Group Plc plans to restructure half of its loans after plunging oil prices, the coronavirus lockdown and a naira devaluation hindered the ability of the Nigerian bank’s clients to repay their debt, Bloomberg News reported. Credit facilities across industries ranging from oil and gas to small- and medium-sized enterprises will be reorganized, the Lagos-based lender said in a presentation on Tuesday. New terms will include a six-to 12-month moratorium on principal debt repayments and an extension on loan maturities of up to two years.
Nigeria’s central bank took 1.47 trillion naira ($3.8 billion) from lenders as additional cash reserves for failing to meet regulatory targets, according to people with knowledge of the matter, Bloomberg News reported. The accounts of almost 30 commercial lenders held with the central bank were debited by the regulator for missing thresholds on cash-reserve and loan-to-deposit ratios, the people said, asking not to be identified because the matter is confidential. The lenders are appealing the move, they said.
Nigerian banks still trying to recover from an economic contraction in 2016 now face a triple whammy of coronavirus, plunging oil prices and volatile markets that could further delay progress, Bloomberg News reported. The 2014 collapse in crude dried up foreign exchange in Africa’s biggest producer of the commodity, resulting in the first recession in 25 years and a currency devaluation. Businesses struggled to make repayments, heaping piles of toxic loans onto the books of lenders.
RT Briscoe (Nigeria) Plc is finalising arrangements to raise new capital to pay its burgeoning debts and improve working capital as the automobile company struggles to stave off insolvency, The Nation reported. In a regulatory filing at the Nigerian Stock Exchange (NSE), the board of the company stated that it was finalising arrangements for an open-ended actively managed fund to raise funds from the capital market. The net proceeds of the fund raising will be used to settle existing liabilities and increase working capital.
After months of forcing lenders to extend more credit, Nigeria’s central bank last week stunned markets with a measure that could result in the opposite response, Bloomberg News reported. Governor Godwin Emefiele increased the percentage of deposits that lenders need to park with the regulator -- and which doesn’t earn interest -- by 500 basis points to the highest level in more than four years. By upping the cash reserve requirement to 27.5%, the central bank is draining lenders of the funds they would typically use to create loans.
A consultancy firm that allegedly arranged a fraudulent $184 million loan announced by Nigerian oil company Lekoil Ltd said on Wednesday that it welcomed an investigation into the matter, Reuters reported. Shares in Lekoil Ltd fell by more than 70% following a suspension of trading after the firm discovered the loan was fraudulent. Lekoil had suspended trading of its shares on the London Stock Exchange on Monday after finding that the $184 million loan it had announced from the Qatar Investment Authority was a “complex facade” by individuals pretending to represent the QIA.