The Central Bank of Nigeria (CBN) has rejected First Bank of Nigeria’s (FBN’s) proposed loan restructuring for Honeywell Flour Mills and ordered the bank to recover the loan granted the company immediately.
According to The Nation, Mr. Oba Otudeko a member of the board disbanded by the CBN on Thursday, is the brain behind flour mill.
He had apparently used his shares in FBN Holdco as collateral for the loan facility extended to Honeywell by First Bank.
The apex bank is said to be upset with the First Bank for alleged non-compliance “with regulatory directives to divest its interest in Honeywell Flour Mill despite several reminders.”
Accordingly, the CBN ordered First Bank “to divest the equity investments in all non-permissible entities such as Honeywell Flour Mills and Bharti Airtel Nigeria Ltd within 90 days and forward evidence of compliance in accordance with the timelines above to the CBN.”
Otudeko stands the risk of losing his shareholding in FBN Holdco if he fails to offset the loan within the 48 hour deadline given by the CBN.
Meanwhile, the share price of FBN Holdings (FBNH) Plc dropped to N6.90 on Friday at the Nigerian Exchange Limited (NGX), following the dissolution of the company’s board.
It is the highest drop since December 10.
