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Nigerian Bank Seizes Supermarket Over Mega N871.5bn Debt, Following Stallion Group Takeover

Supermarket Under Siege: Nigerian Bank Moves to Take Over After Stallion Group’s N871.5bn Debt Takeover

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Nigerian Bank Seizes Supermarket Over Mega N871.5bn Debt, Following Stallion Group Takeover

   The United Bank for Africa in Kenya has been granted the right to auction off a supermarket property.

The courts allowed the bank to move forward with the sale after the defaulting company was unable to settle their outstanding debt.

Similar actions were taken by the bank in Nigeria, where it had seized the assets of the internationally established Stallion Group.

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The United Bank for Africa’s subsidiary in Kenya has secured legal authorization to auction a plot of land owned by Uchuni Supermarkets. The action is taken in light of an unpaid debt totaling N871.5 billion (equivalent to Ksh 162 million). 

The permission to sell the property was granted by a High Court after it was revealed that the supermarket, now defunct, and its management, were still failing to pay back the debt. This nonpayment persisted three years after an agreement was documented in the Company Volinary Agreement (CVA).

UBA allowed the auction of a supermarket land

oup an enormous debt.

UBA Kenya made an announcement in 2022 to auction the supermarket’s property. This move coincided with the government’s decision to compulsorily acquire the same land. UBA maintains that it should be the first recipient of the sale proceeds as the property’s title serves as their collateral. 

Despite the controversy, the bank is pushing forward with its plan to auction the land and recapture its funds. 

As per Justice Mabeya, the debtors haven’t made any payments three years into the CVA. Furthermore, there’s no evidence to suggest that non-core assets would be sold, and the profit used to settle creditors as initially agreed upon. 

“Only beautiful promises that are made by the company (board). The company must be told that creditors do not live on empty, beautiful promises that are nothing but a bluff! Businesses and the economy are run on cogent and pragmatic proposals that are not only realizable but are practicable and real,” the judge said.

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The embattled supermarket contradicts the bank’s course of action, asserting that the issue was previously addressed and the suggested application had been dismissed then. 

Lawrence Ngao, representing the supermarket, argues that the Company Voluntary Arrangement (CVA) remains in force and has been partially reviewed after discussions with creditors. 

He declares that UBA’s claim amounts to 10% of the land, approximately a staggering N871 billion. 

The bank’s move has been met with challenges, primarily from other lenders such as the government and ICDC Limited, who allege that their approval was not solicited. 

Defending their position, Ngao emphasizes that a thorough consultation with all creditors led to the CVA’s reactivation in August of the current year. 

He further highlights the property’s importance as a revenue source, asserting that the CVA’s triumph is heavily reliant upon it. Besides, the agreement favors a two-year repayment period for the bank’s loan rather than an immediate settlement. 

However, reports suggest that UBA denies involvement in any meetings, as it was neither invited nor acknowledges the revised CVA.

Court demands documents showing the value of landed properties

 the auctioning of a supermarket’s land.

The court has been presented with documents showing an estimated worth of the property. As of September 2018, it had an open market value of about Sh600 million, with a forced sale value set at Sh450 million. 

According to a Company Voluntary Arrangement (CVA) adopted on July 1, 2020, it was agreed that secured creditors would receive a fraction of their old debts right away, while the rest would be paid off over a span of five to six years following the disposal of non-essential assets. 

This agreement also clarified that all existing fiscal decrees, claims for debt recovery, outstanding loans, and rent claims, along with interest and penalties against the company as of March 2, 2020, will be settled in accordance to the CVA. 

Unfortunately, per Justice Mabeya, the company has not been adhering to the terms of the CVA. Payments to creditors have yet to commence, and the management has failed to hold the requisite periodic meetings to address these issues.

UBA takes over Stallion Group’s assets

 massive debt, UBA Nigeria has been granted the go-ahead to sell off a supermarket’s land. This comes after a previous incident where UBA took over the assets of Stallions Group, a multinational firm, due to an outstanding N156 billion debt. The bank seized the assets of Stallion Nigeria Limited and its subsidiaries across Lagos, Port Harcourt, and Kano.

The asset take-over stems from an order issued by a Federal High Court in Lagos, in response to the alleged huge debt suit against the company. The court facilitated this action on Friday, November 10, 2023, with the help of the bank’s receiver, court bailiffs, and police officers in the aforementioned cities. 

Judge Akintayo Aluko endorsed this order on October 20, 2023, upon hearing the motion ex-parte presented by Counsel Tomilolu Adamolekun and Mohammed Usman. This movement was supported by an affidavit sworn by Anthony Chilaka. 

The order will remain effective until the motion on notice is heard and decided. This hearing is slated for November 20, 2023. As reported by Vanguard, the seized assets include properties in Trans Amadi Industrial Layout in Port Harcourt, KM17, Lagos Badagry Expressway, Lagos State, and No. 54, Challawa Industrial Estate, Kano state, Nigeria.

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