textile, CBN

The Asset Management Company of Nigeria (AMCON) has denied plans to shut down or liquidate the Nigerian Braiding Manufacturers Limited (NBML). The “bad bank” disclosed this in a statement issued recently.

Why AMCON took over 

AMCON , according to its spokesman Jude Nwauzor was forced to take over following the refusal of the owners of the company to negotiate terms of payment of the debt. The bad bank then obtained a court order enabling it to take possession of the Company through its Receiver Manager, Dr. Yakubu Fobur.

The company according to the statement will resume full production soon.

Origin of the loan  

NBM in 2000 obtained an overdraft facility of N100 million from Oceanic Bank. The firm however filed a suit at a Kano State High Court protesting what it termed exorbitant bank charges which led to the loan reportedly ballooning to over N1 billion.

Oceanic Bank was eventually acquired by Ecobank, and the loan purchased by AMCON.

The Asset Management Corporation of Nigeria (AMCON) was established on the 19th July 2010, when President Goodluck Jonathan signed the AMCON Act into law.

The “bad bank” is owned by the Federal Government but its shares are held by the Central Bank of Nigeria (CBN) and the Ministry of Finance in trust. The corporation has recovered N1 trillion from debtors since inception, with cash accounting for 60% of recoveries.

NBM, was established in 1962, and is located in Kano State. The company employs over 1000 workers.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

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