Loan dispute with GHL: Stock price of FBN Holdings jumps by 7.86%
FBN Holdings shares rose 7.86per cent week-to-date (WTD), closing the week ending January 10, 2025, in the green, despite an ongoing loan dispute with General Hydrocarbons Limited (GHL).
Despite the ongoing legal battles, FBN Holdings shares still recorded a 7.86per cent gain, closing at N30.20 in the second week of January 2025.
FBN Holdings began 2024 at a share price of N23.55, experiencing a strong bullish run in the first quarter that peaked at N35.55 in March.
A leaked letter to Central Bank Governor Yemi Cardoso revealed that the dispute stems from a loan transaction made during Oba Otudeko’s tenure at FBN Holdings.
The deal was meant to use profits from Oil Mining License (OML) 120 to reduce First Bank’s non-performing loans and avoid hefty provisions in 2021, but GHL claims the bank has failed to deliver on its commitments.
Adding to the tension, First Bank froze $225.8 million of GHL’s funds across banks, a move GHL says violates an earlier court order.
However, the momentum slowed in April 2024, as uncertainty over the Central Bank of Nigeria’s recapitalization mandate pushed the stock down to N23.90, despite a trading volume of 218 million shares.
By July, the bearish sentiment deepened, sending the price to a low of N20.95.
However, the stock began a gradual recovery in August, climbing steadily to close at N28.05 in December, delivering a year-to-date gain of 19per cent.
This upward trend has trickled into January 2025, with the stock reaching N30 and closing at N30.20 on January 10, backed by a strong monthly trading volume of 272 million shares.
On December 30, 2024, the Federal High Court in Lagos issued a Mareva injunction freezing $225.8 million in assets belonging to General Hydrocarbons Limited (GHL) over a loan dispute with First Bank of Nigeria (FBN).
The injunction comes as GHL pursues arbitration proceedings against FBN, accusing the bank of breaching their partnership agreement.
GHL’s legal team has called the injunction unlawful and announced plans to challenge it in court.
They also claim an earlier court ruling prevents FBN from acting against GHL’s OML operations or related loan transactions.
Meanwhile, the legal tussle continues to delay critical oil exploration and development activities under OML 120.
