Shell Discharges Caverton Helicopters from $55m Loan Repayment Obligations
The Shell Petroleum Development Company of Nigeria Limited (SPDC) has confirmed the non-indebtedness of Caverton Helicopters Limited on the $55 million loan advanced to the company by the oil giant to finance the acquisition of three new AW 139 helicopters.
SPDC has also discharged and released Caverton Helicopters from all repayment obligations under the said loan, having fully recovered the total loan from the firm, in line with the agreement by all the parties.
Shell had in May 2010 awarded Caverton Helicopters a five-year contract for the provision of helicopter services with a twoyear renewable option, after a highly competitive technical and commercial evaluation processes.
The contract was the largest ever given to any national company in Nigeria by Shell and given the oil giant’s global reputation for very high safety and quality standards, Caverton Helicopters’ strong attention to safety, quality and continuous improvement, which accounted for its zero accidents to date, also contributed to the award that had made the company the largest fleet manager of the AW139 helicopter in sub-Saharan Africa.
THISDAY gathered that in the variation to the contract Number NG01007424 awarded by SPDC to Caverton and DanCopter, Shell advanced the sum of $55 million to Caverton Helicopters as part of Shell’s strategy to strengthen local capacity in the oil and gas industry, with the overall aim of adding value to the Nigerian economy.
By the terms of the agreement, the loan would be repaid from the proceeds of the same contract awarded by SPDC to Caverton for the provisions of aviation services.
In fulfilment of the terms of the contract, SPDC said it had separately disbursed various sums of money amounting to the said sum of $55 million to Caverton and DanCopter A/S.
Caverton had also secured Advance Payment Guarantees (APGs) from Standard Chartered Bank (SCB) Nigeria Limited as a security against early termination of the contract.
However, in a letter dated July 25, 2017, and addressed to the Managing Director of Caverton Helicopters Limited, SPDC confirmed that the total sum of $55 million has been fully recovered from Caverton and DanCopter from the proceeds of the contract Number NG0107424, as contained in the operating plan in the original contract.
The letter, which was signed by SPDC’s Finance Director, Yakov Kravchenko and obtained by THISDAY, also referred to Shell’s earlier letter of December 17, 2014, discharging and releasing DanCopter of all repayment obligations for its portion under the loan.
In the letter addressed to Caverton Helicopters titled: “Confirmation of Nonindebtedness and Release of Advance Payment Guarantee Procured by Caverton Helicopters,” SPDC noted that the release and discharge of Caverton do not affect the firm’s liability to continue to provide helicopter services to SPDC under the same contract.
Part of the letter reads: “(a) we hereby discharge and absolutely release Caverton Helicopters from all repayment obligations under the loan. This letter further serves to confirm to SCB, or any other third parties that Caverton’s liability for its own portion of the loan has been completely discharged, and (b) Further to paragraph (a) above, we hereby return the Supplemental Guarantee made on October 21, 2016, in favour of SPDC, in the amount of $4,293,804.33.”
Speaking at the contract signing ceremony in 2010, Shell’s then Vice President, Health Safety and Infrastructure, and immediate past Managing Director of Nigeria LNG Limited, Mr. Babs Omotowa had noted that “in highly technical areas of our industry, a partnership between a Nigerian company and foreign technical partner enables building of capacity and transfer of skills and technology”.
“Our vision is that through this relationship, SPDC and Shell Nigeria Exploration Production Company (SNEPCO) would be a catalyst for a Nigerian company to grow and be able to compete internationally outside Nigeria,” Omotowa, who is now Vice President in charge of Safety and Environment (S&E) at the Shell Upstream International at The Hague, Netherlands, had said.
The acquisition of 6 AW 139 helicopters from the Original Equipment Manufacturer – AgustaWestland enabled the appointment of Caverton Helicopters Limited as an AgustaWestland Authorised Service Centre for the AW139 intermediate twin helicopter in Nigeria and West Africa in June 2012.
Caverton became the first company to be so appointed by a major aircraft manufacturer in the West African sub-region.