Fidelity Bank Plc has denied widespread rumors of impending bankruptcy following a Supreme Court judgment related to a $3 million credit facility granted in 2002 by the defunct FSB International Bank.
In a statement released on Monday, the bank, through its Divisional Head of Brand & Communications, Meksley Nwagboh, reassured the public, depositors, and stakeholders of its strong financial standing despite media reports concerning the court judgment.
Fidelity Bank is currently seeking judicial clarification on the exact calculation of the judgment sum.
The bank emphasized that it is preparing for the second phase of its recapitalization, having already exceeded its ₦127.1 billion target in the first phase’s combined offer program.
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The bank clarified that the judgment stems from a legacy transaction in 2002 when FSB International Bank provided a $3 million credit facility to G. Cappa Plc, secured by a mortgage on an Ikoyi property. G. Cappa defaulted on the loan and subsequently sued FSB at the Federal High Court to prevent the sale of the mortgaged property.
In its ruling, the Federal High Court affirmed that FSB, as the legal mortgagor, had legitimately sold the leased interest in the property to Sagecom in 2011.
However, the court declined to order vacant possession of the property, deferring that issue to the Lagos State High Court. Meanwhile, G. Cappa remained in possession of the property and continued collecting rents.
Fidelity Bank believes that G. Cappa is responsible for all losses incurred by Sagecom due to its continued control of the property and collection of rents.
Despite this, the bank stated that it is open to settling the obligation after exhausting the appeal process.
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