The Honeywell Group has said its loan with the First Bank is being serviced.
In a statement issued in Lagos on Sunday, the group also said its loan obligation to the bank had been reduced by 30 per cent in the last two and half years.
The company also explained that since 1972, the group and First Bank had had a professional business relationship which preceded the group’s investment in the bank over a decade later.
The explanation came after the Central Bank of Nigeria’s directive for Honeywell to fully repay its obligations to First Bank within 48 hours, warning that failure to do so would cause the CBN to take regulatory measures against the insider borrower and the bank.
The Chairman Honeywell Group, Oba Otudeko, also served as Chairman of FBN Holdings PLC until he was sacked along with other directors on Thursday by the apex bank.
The apex bank had noted in a letter on Wednesday that First Bank had yet to comply with regulatory directives on divesting its interest in Honeywell despite several reminders.
In addition, the CBN asked First Bank to forward evidence involving the divestment of interest in Honeywell Flour Mills groups and Bharti Airtel Nigeria Ltd within 90 days.
According to the Honeywell Group, the credit facilities accessed from First Bank were granted after due negotiations, with the necessary documentation and in line with regulatory policies and industry standards.
The statement said, “In 2015, First Bank under the directive of the Central Bank of Nigeria, 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.
“In addition to the above, 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 a 2001 circular. This was duly provided through an authorisation to place a lien on the shares