FG approves insolvency regulations, set to issue another $950m bond before end of May

Minister of Industry, Trade and Investment, Otunba Adeniyi Adebayo has approved the Insolvency Regulations (IR) 2022, according to the Corporate Affairs Commission (CAC).

This is also as the Federal Government says it has plans to issue another $950 million bond before the month ends or in May as part of the borrowing plan for the year.

A statement signed by Mr Rasheed Mahe CAC’s Head, Media Unit on Sunday in Abuja, said the approval of the the Insolvency Regulations (IR) 2022 was in line with the powers conferred on the Minister by Section 867 of the Companies and Allied Matters Act (CAMA) 2020.

According to Mahe, the IR will henceforth regulate insolvency proceedings under CAMA.

Insolvency is a situation in which an individual, or company cannot pay off bills and debts.

The IRS states that a person is insolvent when the total liabilities exceed total assets.

Mahe listed the proceedings as Company Voluntary Arrangements, Administration of Companies, Receivership/Managership, Winding-up by the Court, and Creditors’ Voluntary Winding-up.

Others include Arrangements and Compromise, Netting, and Dissolution of Incorporated Trustees.

He said that the IR would not apply to rules of the courts relating to insolvency applications made by the Chief Judge of the Federal High Court.

It would also not apply to a court designated by an Act of the National Assembly as being vested with jurisdiction to hear cases arising out of CAMA.

Meanwhile, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, disclosed last on Thursday in an interview with Bloomberg that government plans to issue another $950 million bond before the month ends or in May.

It would be recalled that in March this year, the federal government had raised a $1.25 billion seven-year eurobond in the International Capital Market (ICM) to finance capital projects in the budget.

Ahmed said the country will raise the $950 million soon and weigh options on whether to return to the market this year or not

“For 2022, we have already issued early in this year, in March actually, $1.25 billion, and that means that the market is still very receptive to Nigeria. We still have about $950 million to issue and that should be sometime very soon in the month of April or May,” she said.

“Later in the year, we would consider our options dependent on what the market looks like to determine whether we would need to go out to the market or not. But otherwise, we have a vibrant domestic market and we have been getting the financing that we need to run the budget from the domestic market.”

She added that the Ukraine-Russia war is causing another wave of economic distortion and Nigeria is very much affected in the sense that energy prices are high which means increasing cost of transportation and that is also reflecting in the increasing cost of food.

“Also, for Nigeria as a producer of fertilizer, one of the major inputs for fertilizer production potash, is also affected. Now it is scarce and that means input is also very expensive and we’re seeing that reflected in the high cost of fertilizer,” she said.