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Union Bank Sues PAN over N9bn Loan

By on February 6, 2012

Union Bank of Nigeria Plc has dragged foremost automobile plant, Peugeot Automobile Nigeria (PAN) Limited, before a Federal High Court in Kaduna for refusing to re-pay the sum of N9 billion credit facilities it availed it to embark on business expansion.
The bank said the court should compel the automobile company to pay it all the facilities and the outstanding interests.

In its statement of claim obtained by THISDAY, the bank is claiming that by several letters in 2003, 2006 and 2008, it granted the defendant’s applications for credit facilities on the terms contained in the letters.

In the statement of claim, which was filed by Miss Marian Divere Forteta of Charles Musa & Co., the bank (plaintiff) stated that it also granted several guarantees and indemnity facilities on behalf of the defendant on terms contained in the guarantee documents.

It averred that the defendant acknowledged the grants of facilities from the plaintiff by several letters.

It added that the defendant did not make good its obligations to liquidate its indebtedness to it on the terms contained in the facility letters and till date is yet to settle its indebtedness to the Plaintiff.

It contended that it wrote various letters demanding liquidation of the debt of the defendant and that in a letter dated 29/12/10 it demanded that the defendant settle its outstanding indebtedness which, as at December 12, 2010, stood at N8.7 billion being the total of direct credit facilities and guarantee it granted the defendant.

The bank argued that the period granted for repayment of the facilities had since expired, adding that for its survival, it depends on the repayment of credit facilities and realisation of interest on facilities such as the one granted defendant.

It stated that because its several attempts, through oral discussions and meetings to recover the debt did not yield satisfactory result, it instructed its solicitors, Charles Musa & Co., to recover the said debt on its behalf.

It said its solicitors, by its letter dated April 14, 2010, demanded that the defendant offset its indebtedness to the plaintiff and that the defendant responded to the demand from its solicitor by its letter dated April, 26, 2010 in which it stated that its indebtedness as at April, 22, 2010 was in the sum of N4.6 billion

The bank contended that on the defendant’s initiative, the parties went into extensive negotiations for settlement of the defendant’s indebtedness which had yielded no result.
It added that the antics of the defendant and other customers like it in reneging on the terms after it has received the facilities is one of the reasons it was bailed out by the Central Bank of Nigeria which led to the sacking of its management.

Via  Thisday