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Our facilities with First Bank performing, says Honeywell


Honeywell Flour Mills

Following the directive by the Central Bank of Nigeria (CBN) directive that Honeywell Flour Mills Plc fully repays its obligations to First Bank of Nigeria Limited, the firm yesterday explained that it has continued to meet all its obligations on its facilities according to agreed terms and has reduced its exposure by nearly 30 per cent in two years.

According to Honeywell, its facilities, charged at market rates, have been performing while the bank continues to earn significant interest from them.

The Honeywell Group, yesterday, explained that since 1972, it has maintained a professional business relationship, which preceded the Group’s investment in First Bank over a decade later.


It would be recalled that the CBN had issued a 48-hour ultimatum to Honeywell to fully repay its obligations to First Bank as the failure to do so could cause the apex bank to take regulatory measures against the insider borrower and the bank.

The company said: “Honeywell Group’s relationship with First Bank has always been professional, at arm’s length and following all regulatory and industry practices and norms. The credit facilities, which we have accessed from First Bank and indeed other banks, were granted after due negotiations, with the necessary documentation and in line with regulatory policies and industry standards.

“We have serviced all our credit facilities in line with the terms agreed with First Bank and at no point have any of these facilities been non-performing.

“In 2015, First Bank under the directive of the Central Bank of Nigeria (CBN), drew our attention to a 2004 circular (BSD/9/2004) which requires that insider-related facilities must not exceed 10 per cent of paid-up share capital. Based on this directive we subsequently entered negotiations with the bank to agree an appropriate repayment structure and the final negotiated position was duly approved by the CBN.”

The Group further explained that following agreed terms, its facilities are adequately secured with First Bank with collaterals in place at over 170 per cent of forced sales value and 230 per cent at open market value.

It added that First Bank, on the directive of CBN, requested additional security in the form of FBN Holdings Plc shares held by the Chairman of Honeywell Group, Dr. Oba Otudeko, citing 2001 circular that was duly provided through an authorisation to place a lien on the shares.


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