Banks nervous on US$1.4 billion exposure to INTELS

by | October 17, 2017 2:50 pm

Banks exposed to INTELS, Nigeria’s leading oil and gas logistics company are getting nervous over their exposure to the company as the Federal Government’s moves to revoke the pilotage agreement with the company.

INTELS has entered into loan agreements with several Nigerian banks based on the revenues earned from the agreement with Nigeria Ports Authority (NPA).

The company says it has borrowed $1.4 billion (N428.4 billion) from banks to execute the agreement with the understanding that the debt would be offset from monies realized from the pilotage services paid directly to the banks. The revocation of the agreement with NPA means that the outstanding loans to the banks are likely to be classified as non-performing.

The Federal Government has described the agreement entered between NPA and INTELS as illegal ‘ab initio.’ The Attorney General of the Federation and Minister of Justice Abubakar Malami has therefore written to the NPA to exit the agreement.

But faulted claims by NPA that the contract was terminated based on the advise of the Attorney-General of the Federation.

“At what point are revenues eligible to be paid into the Consolidated Revenue Fund? NPA acting on behalf of the Federal Government entered into a profit sharing agreement with INTELS with 72 percent  of the revenue going to NPA while 28 percent is for INTELS.

“The objective interpretation of the Constitution should be that the revenue due to the Federation should be the 72 per cent due to NPA,” he said.

Bolaji Akinola, spokesman for INTELS said  NPA could not fault INTELS in the execution of the contract, “which we handled most diligently”.

According to him, “INTELS faithfully implemented the covenants of the agency agreement and also substantially boosted government revenue.”

“We took the pilotage service from a revenue stream of a few thousand dollars per month to multimillion dollars per month service hence attracting the envy of many.”

The company also said that the persecution it is currently facing is “rather unfortunate” and will certainly not stand the test of time.

Akinola also accused the present management of Nigerian Ports Authority (NPA) of deliberately frustrating attempts to address the issues raised by introduction of the Treasury Single Account (TSA) in the execution of its pilotage agency agreement.

INTELS said the issues arose because the pilotage agency agreement, signed in 2010, did not envisage the TSA, and as such did not factor it in its implementation.

Akinola said series of meetings, letters and proposals on how to resolve the TSA imbroglio was rebuffed by the NPA Managing Director, Hadiza Bala Usman.

“Deliberate stumbling blocks were place on the path of resolving the issues and this is indicative of a sinister motive,” Akinola said.

Akinola said that on 5th May 2017, INTELS sent a letter to NPA proposing the opening of a jointly signed account between the company and NPA on which the boat service revenues would have been directed, but that this proposal, like many others, was rebuffed.

The INTELS spokesman said those who criticize the company’s operation are “either ignorant or plain mischievous” of the company’s monumental achievements and value addition to the Nigerian economy.

He said the present management of NPA is pandering to the antics of the company’s detractors at the expense of government revenue, huge investments and several jobs, contrary to the position of fairness and objectivity that it should have adopted.

“It is clear that there is more to all these than the TSA issue because all our attempts to resolve the TSA imbroglio met with brick wall. There was no sincere or genuine desire to address the issue. What was evident was a clear case of giving a dog a bad name to justify hanging it,” he added.

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