Indigenous shipping lines collapse, sell off assets to pay debts

Posted by News Express | 25 September 2016 | 2,251 times

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As a result of the harsh economic situation in the country, indigenous ship owners are now selling off their properties in choice areas across the country to repay huge debts they owe banks.

The entrepreneurs are said to be owing some Nigerian banks huge non-performing loans to the tune of N5 billion for ship purchases.
Speaking with our correspondent, the ship owners blamed their predicament on the current fluctuations in the global oil market, lack of patronage and non-implementation of the Cabotage Act among others.
Confirming the negative development, the immediate past president of the Nigerian Ship owners Association (NISA), Chief Isaac Jolapamo, in a chat with our correspondent, disclosed that majority of his colleagues are now selling their properties to finance the loan.
Jolapamo who owns Morlap Shipping, also stated that the Nigerian shipping industry had been in recession even before the country entered into an economic recession and that successive governments have done little or nothing about it.
"I had over 20 properties in Victoria Island, Ikoyi and Lekki before. Now, I have lost all including the one I’m living in now as I have to sell them to pay huge debts I was owing the banks. This is the business I have been doing for over three decades. The situation is as bad as that,’’ he said.
Similarly, another ship owner who craved anonymity said things are very tough for him now economically. He also confirmed that majority of the local ship owners who are indebted to the banks have resorted to selling their properties as the only way to repay their huge bank loans.
Also speaking on the issue, President of Al-Dawood Shipping, a local shipping firm, Captain Niyi Labinjo said most of the ship owners have lost prime properties to the banks due to their non-performing loans.
“All the companies are also heavily indebted to banks and are mostly unable to service the loans they took to buy ships,” he said even as he declared that he has sold most of his properties to pay bank debt.
The general secretary of the Nigerian Shipowners Association (NISA), Tunji Brown also disclosed that the banks are on the trail of the debtor-ship owners to repay their huge debt.
“We are unable to get jobs, banks are running after us to pay back loans, we are not able to access loans anymore because loans already provided to ship owners are not being paid so we are facing a difficult time,” he said.
Indigenous Shipping companies like Equatorial Energy, Oceanic Energy, Morlap Shipping, Peacegate, Pokat Nigeria Limited, Al-Dawood Shipping, Potram Nigeria Limited, Joseph Sammy, Genesis Worldwide Shipping and Multi-trade Group that were once thriving businesses are now either completely dead or are in abyss as majority of them have been selling their properties or being seized by the banks.
However, when asked about what to do to get the local shipping industry back on track, Jolapamo urged  the federal government to enact the Local Content Law and review its trade policies.
The ship owners argued that part of what contributed to their problems was government allowing foreigners to take over the cabotage trade in the country.
He also asked the government for intervention fund to save local shipping industry from imminent collapse. “We gave a recommendation to federal government to give intervention fund and they said it’s a no go area and we asked them to change trade policy so that we sell our crude  on Cost Insurance Freight (CIF) but till today nothing has been done. We call on the government to strictly enforce Local Content Law and not allow foreigners take over the cabotage trade,’’ Jolapamo said.
•Source: LEADERSHIP Sunday. Photo shows Jolapamo.

Source: News Express

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