By John Ogunsemore
Billionaire businessman, Femi Otedola has revealed how banks that courted him suddenly flipped after his business ran into substantial financial difficulty.
The Chairman of Geregu Power Plc shared the harrowing experience in his upcoming book, Making It Big: Lessons from a Life in Business, scheduled for release on August 18.
Otedola faced a debt crisis starting in 2008, primarily due to a combination of economic shocks that impacted his business empire, centred around Zenon Petroleum and later Forte Oil.
The crisis was triggered by a poorly timed diesel shipment ordered when crude oil prices were at $147 per barrel.
By the time the shipment arrived in Nigeria, oil prices had plummeted to $40 per barrel, resulting in huge losses.
This was compounded by the devaluation of the naira (from N120 to N167 per dollar), which increased the cost of servicing foreign loans, and a stock market crash.
His financial losses included over $480 million from the oil price collapse, $258 million from naira devaluation, $320 million in accrued interest, and $160 million from stock market losses, totaling a debt of approximately $1.2 billion.
He wrote, ““All told, I lost more than US$480 million to the plunge in oil prices, US$258 million through the devaluation of the naira, US$320 million because of accruing interest, and another US$160 million when the stocks crashed.
“It was devastating, like a terrible nightmare, but a nightmare would have been better: day would break, and I would wake up. There was no waking up from this.
“One moment, I was the darling of the banks, who did everything in the world to court me, do business with me, give me loans, take deposits from me. They would send bewitching ladies to make their offers more convincing, and now I was waking up to the sight of hefty, barrel-chested men standing menacingly in front of my gate, waiting for the moment I’d step out of my compound.”
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