Seplat’s cash has been limited by Access Bank and Zenith Bank, totaling N16.7 billion, with another N5.3 billion restricted cash balance not available for general use by the oil company.
Ripples Nigeria discovered that Seplat Energy had a deposit of N8.5 billion unilaterally limited by Access Bank, with N8.2 billion locked away at Zenith Bank as of June 30, 2021, out of the entire amount blocked.
Why Seplat Energy can’t access the restricted funds?
The oil and gas firm’s chairman, A.B.C Orjiako, Cardinal Drilling, and Kalu Nwosu, the former Managing Director of Cardinal Drilling, are embroiled in a court battle between Access Bank and Seplat.
Between 2012 and 2014, Cardinal Drilling took out a loan from Diamond Bank to purchase four drilling rigs (CDS Rigs 101, 201, 202, and 203); after Diamond Bank was acquired by Access Bank, the latter assumed the former’s debts and other liabilities.
Cardinal Drilling was unable to repay an outstanding credit of $85.8 million, thus Access Bank sued Seplat. The lender, the oil exploration company claimed, was breaking the law by suing Seplat and Orjiako, who were not party to the debt deal.
Cardinal Drilling, on the other hand, is a sibling company and shell company of Seplat, according to Access Bank, with Orjiako as the promoter. Cardinal allegedly transferred the loan to Seplat, according to the report.
Following the lawsuit, Access Bank froze the N8.5 billion deposited by Seplat, while the restricted N8.2 billion in Zenith Bank is written down as a cash-backed guarantee “to fulfill the requirement of an order of the Court of Appeal, to seek the release of any order relating to the case between Seplat Energy Plc and Access Bank Plc,” according to the domestic oil firm.
These deposits have been restricted for a period of time. As of June 30, 2021, Seplat had a total indebtedness of $755.2 million, with total cash at bank of $298.8 million, leaving a net debt of $456.4 million.
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