Stanbic Bank has moved to court seeking recovery of Shs27.4b.
The case is premised on an unpaid loan advanced to Fol Logistics and its managing director Mohammed Ahmed Bawazir.
In the case filed before the Commercial Division of the High Court, Stanbic claims that Fol Logistics has been its customer under a mutually beneficial relationship since January 21, 2014.
Court documents further indicate that between February 5, 2016 and October 5, 2017, Fol Logistics applied for and was granted various loan facilities, some of which were designated as short term, short term import loans, import loans and forward exchange contracts.
The loans, documents show, were at all material time secured among others, by personal guarantees issued by Mr Bawazir, who, Stanbic claims, confirmed to have understood the facility letters and accepted the arrangements therein on behalf of Fol Logistics.
"At the request of [Mr] Bazawir, Stanbic availed the facilities to Fol Logistics between the period of 2016 and 2019 … varied at the request of Fol Logistics through [Mr] Bazawir," documents filed before court, read in part.
However, despite utilising the funds, Stanbic claims, Fol Logistics and Bazawir breached agreed payment terms and defaulted on repayment as scheduled in the credit facility agreements.
Stanbic also claims that following several meetings and discussions, particularly with Mr Bazawir, the outstanding obligation due to Fol Logistics was consolidated into a single facility on October 5, 2018 with Fol Logistics accepting the new terms of the revised facility in a resolution dated October 10, 2018.
However, despite Stanbic granting Fol Logistics a moratorium as requested, it proceeded to default on the terms of the new facility letter, forcing Stanbic to issue a notice of default on September 20, 2019.
The notice also sought to demand for payment of the outstanding sums but Stanbic claims was ignored.