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How Seplat was roped into Cardinal, Access Bank tussle

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There were indications that the sealing of the office of Seplat Petroleum by a court order was a collateral damage to the petroleum firm in a fall out of the failed loan agreement between Access Bank Plc and Cardinal Drilling Services Limited.

Vanguard  learnt that the loan agreement had subjected the oil rig assets of Cardinal to a takeover in the event of its failure to liquidate the loan it obtained from the bank.

Consequently, given the importance of the Cardinal’s oil rigs to Seplat’s operations, Seplat had to support discussions between Cardinal and Access Bank to resolve Cardinal’s indebtedness against following Access Bank’s threat of foreclosure on the rigs.

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It was learnt that Seplat did not make any commitment to the bank in connection with Cardinal’s indebtedness, except the support to the settlement discussions in order to retain Seplat’s continued use of the Cardinal’s rigs in ongoing operations.

However, following Cardinal’s increasing indebtedness and failure to pay the agreed settlement, the bank began to bring Seplat into its remedial action against Cardinal.

But Cardinal,  Vanguard  learnt, had also told the bank that it was discussing with Seplat on possible funding support.

Clause 6 of the Deed of Debenture allows Access Bank to appoint a Receiver/Manager over Cardinal’s assets if Cardinal fails to liquidate the loan.

On 13th November 2020, Access Bank filed a Court action against Seplat, Cardinal, a Seplat Director and a Cardinal Director as “defendants”.

Access Bank asked the Court to validate the appointment of Kunle Ogunba & Associates as the Receiver/Manager, validate the Receiver/Manager’s authority to take possession of the four Cardinal Rigs and other assets of persons and companies  connected to Cardinal drilling, restrain all defendants from disposing or dealing with the assets, declare that the defendants have no right to enter into, or deal with, any of the assets.

Though Seplat’s office was sealed without prior notice, sources close to the firm also said that sealing the office was a violation of the rights of the owner and other tenants of the building who were prevented from accessing the building when they are not part of the litigation. Seplat is one of the tenants in the building.

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