News & Events

APR 2020 NEWS Aluko & Oyebode

As some key states in Nigeria enter into the fourth week of lockdown due to the COVID-19 Pandemic, different sectors are considering the impact of the pandemic and various regulatory interventions on their operations. In the financial services sector, while some corporates could potentially be looking to banks for funding to bridge liquidity gaps, lenders will be assessing their loan portfolios in light of potential borrower defaults as well as rights and obligations under existing financing arrangements.

This note will highlight key considerations for lenders in relation to existing financial arrangements with customers.

Closing Transactions during Lockdown

Challenges have arisen in connection with closing transactions and meeting certain conditions precedent during the lockdown. Due to the restriction on movement and prohibition of gatherings of more than 20 people, most offices are closed and personnel are working remotely. Parties have experienced difficulties with convening meetings to approve transaction documents, executing documents under seal (in view of the standard requirement in most constitutional documents that the common seal be affixed “in the presence of” a director and secretary), attestation of signatures etc. To resolve these issues, careful consideration will need to be given to the borrower’s constitutional documents, provisions of the Companies and Allied Matters Act (CAMA), the Evidence Act and other applicable legislation as well as relevant case law. All parties will need to work together to determine what is feasible in the current circumstances while ensuring compliance with legal requirements.

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