Oil and gas engineering firm Nestoil Limited has instituted legal action against eight Nigerian banks and the African Export-Import Bank (Afreximbank) at the Federal High Court in Abuja, seeking restraining orders to stop ongoing receivership steps initiated against the company over alleged loan defaults.
The suit came before Justice Mohammed Umar on Wednesday, with legal representatives of Nestoil and the involved financial institutions — including Access Bank and FBNQuest Merchant Bank Limited — present in court.
This development follows a recent enforcement move in Lagos where armed operatives of the Nigeria Police Force (NPF) sealed off the company’s headquarters in Victoria Island. The action was carried out pursuant to a Federal High Court order that froze Nestoil’s bank accounts, shares, and other assets in connection with an alleged $1.01 billion and N430 billion debt owed to FBNQuest Merchant Bank Limited and First Trustees Limited, both subsidiaries of First Bank of Nigeria Limited.
Background to the Dispute
The financial disagreement stems from what the creditor banks describe as loan repayment defaults under syndicated financing arrangements. The lenders had issued a Notice of Default, a formal legal step that typically precedes asset takeover, receivership, or liquidation processes.
However, Nestoil maintains that the enforcement actions were premature and unlawful, arguing that:
- The loan terms are still under dispute
- Negotiation and restructuring discussions were ongoing
- The company remains solvent and operational
Based on these claims, the firm is seeking injunctive relief to stop the banks from executing receivership or enforcing asset takeover until the court resolves the underlying commercial disagreements.
What Happens Next
Justice Mohammed Umar has directed all parties to file necessary processes, with further hearings expected in the coming days. The outcome is being closely watched in both banking and oil and gas circles due to the scale of the debt and the reputational stakes involved.
Nestoil is one of Nigeria’s major indigenous engineering, procurement, and construction (EPC) players in the oil and gas sector, and the case has potential implications for:
- Credit market stability
- Corporate debt restructuring practices
- Investor perception of Nigeria’s energy services sector
More updates are expected as proceedings continue.
