By Foster Obi
Central Bank of Nigeria (CBN) has released a N50 billion special mechanism for restructuring of existing facilities and provision of further facilities in a bid to resuscitate the Textiles Industry
CBN said on its website Tuesday that this was the result of the meetings held between the Governor and owners of textile mills in Nigeria on August 7, and September 29, 2015. Among the resolutions reached were that the Textile Mills articulate the status of their BOI CTG Loans stating their outstanding loan balances, tenure, interest rate, interest payment and the assistance being sought from CBN
From the guidelines, activities to be covered under the intervention shall include operations in the CTG value chain as follows: Cotton ginning (lint production), Spinning (yarn production)•Textile mills• Integrated garment factories (for military, para-military and schools and other uniformed institutions)
For eligibility to participate in the scheme textile companies shall meet the following criteria : Any textile company with an existing facility in the books of BOI under the CTG scheme(emphasis will be on facilities that are indicating weakness arising from tenor, structure as well as facing cash flow difficulties)•Any textile company with existing facilities in Deposit Money Banks, DMBs/NIFIs.
Textile companies that are not participating under the SME/RRF Projects financed before June 2009 (inception of the BOI CTG Loan) shall not be eligible to participate.
On the modalities, this is a one-off intervention with a seed fund of N50 billion and will terminate by December 31st2025.. Financing amount is a maximum of N2billion for a single obligor in respect of new facilities and N1.0 billion for refinancing. The Fund shall be administered at an all-in rate of return of 4.5percent per annum payable on quarterly basis. The managing agent (BOI) shall receive 1.0% service charge from the return proceeds and remit 3.5% to CBN.
Facilities shall have a maximum tenor of 10years and or working capital facility of one year with provision for a maximum rollover of 3 years. The Intervention allows for a maximum moratorium of 2 years in the facility repayment schedule.
Pix: CBN Governor, Godwin Emefiele
