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GTB wants Virgin Nigeria’s new name reflected in suit

By Innocent Anaba
Guaranty Trust Bank (GTB) has filed an application before a Federal High Court sitting in Lagos, urging the court to change the name of Virgin Nigeria Airways  to Nigerian Eagle Airlines Limited.

GTB had filed a winding up petition against Virgin Nigeria over alleged inability of the airline to service a loan facility of $9,194,577. 36  (N1.3 billion) secured from the bank.

Trial judge in the matter is Justice Dan Abutu. The bank in the petition brought under Sections 409 (1) and 410 (1) (b) of the Companies and Allied Matters Act (CAMA),  is praying the court to wind up the airline.

Counsel to the bank, Mr Kunle Ogunba, is contending in the suit that the airline had  changed its name without the knowledge of the bank, adding that such development would have negative impact on any pronouncement of the court on the matter.

According to the bank, on April 22, 2008, two loan facilities were granted to the airline,  which were for the finance of working capital and issuance of bank guarantee for the supply of spare parts and by another offer letter dated May 8, 2008, the airline was given three loan facilities of $30 million, $10 million and N500 million, for the purpose of financing working capital, issuance of bank guaranty for spare parts and aircraft payment to suppliers.

The bank contended that other facilities were extended to the airline and that the securities for the funds disbursed included negative pledge dated May 9, 2009, revenue collection agreement dated May 9, 2009 and counter indemnity also dated May 9, 2009.

However, the bank argued, of the total facilities granted to the airline, a cumulative sum totalling $15 million was disbursed to it and that it (airline) failed and refused to reciprocate the good gesture by liquidating the debt and several letters had been written to the airline on the consequences of its constant breach of the agreement, all to no avail.

According to the bank, Virgin Nigeria was insolvent, and that it would be in the interest justice for the company to be wound up over its inability to pay the debt.


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