21 oil companies risk collapse as CBN forecloses further credit

NO fewer than 20 oil companies are under threats of liquidation as the Central Bank of Nigeria, CBN, forecloses further credit facilities to them.

This followed last week release by CBN of a new debtor list by companies and organizations in excess of N5billion.

The 21 companies combined are indebted to the financial institution to the tune of over N513.34billion, which were obtained as loans from various banks to run their operations.



The CBN had earlier released a circular, prohibiting credit facilities to debtors of the Asset Management Company of Nigeria, AMCON, which the financial services regulator said was in continuation of its efforts “to strengthen financial stability and entrenching a culture of financial discipline.”

In view of the high level of indebtedness, the CBN banned banks “from approving or disbursing any new credit facilities to all persons and organizations in this list with effect from the date of this circular, until full liquidation of agreed indebtedness to AMCON.”

The regulator also warned banks that failure to adhere to the rule would attract a penalty worth 100 percent of the principal and interest outstanding in the account of the customer.

Although some of the debts listed against the oil companies are litigations, while others classified under various states such as performing, restricted, ongoing negotiation and a host of others s listed below:Early reactions by analysts indicate that some of these companies may never recover from the damage this measure would have on their continued operations.