One of the country’s biggest vehicle assembly firms, Willowvale Mazda Motor Industries (WMMI) has been taken to the High Court by a local financial institution, First Banking Corporation (FBC), seeking to recover over $3,5 million loaned to the firm.
BY CHARLES LAITON
The bank has also sued Motec Holdings as the vehicle assembly’s co-defendant after it allegedly signed the latter’s loan application forms as surety and co-principal debtor for the advanced loan.
It has, however, not been made clear in court papers as to what the purpose of the loan was.
But according to the bank’s declaration filed with the summons under case number HC9624/15, FBC provided banking facilities to WMMI after reaching an agreement sometime in March last year.
FBC said in terms of the said agreement, it loaned and advanced to the car assembly firm by way of a short-term loan facility, a sum of $3 050 000 which was to be repaid in monthly instalments of $50 833 plus interest commencing at end of June last year until the full amount was repaid.
“It was a term of the agreement that in the event of the first defendant (Willowvale Mazda) failing to pay any instalment due to the plaintiff by the due date thereof, then the full amount outstanding would immediately become due and payable with interest at the plaintiff’s penalty rate from time to time,” FBC said.
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“Despite receiving and utilising the loaned amount and an additional capital amount, the first defendant failed to pay the agreed monthly instalments by the due date thereof and is, therefore, in default. As such, the total amount outstanding is now due and payable while interest is now accruing at the plaintiff’s rate from time to time, currently being at 28% per annum.”
The bank added: “As at 30 September 2015, the first defendant was indebted to the plaintiff in the sum of $3 543 679,60, made up as follows; cumulative unpaid capital $3 238 090,33, cumulative unpaid interest $305 239,62 and cumulative unpaid charges $349, 65.”
Turning to Motec Holdings, the bank said the former bound itself in writing as surety and co-principal debtor with the car assembly firm.
“Accordingly, each defendant is jointly and severally liable to the plaintiff for payment in the sum of $3 543 679,60 plus interest, collection commission and costs on a legal practitioner scale,” the bank said.
FBC also indicated it would seek the intervention of the court to issue an execution order for Willowvale Mazda’s immovable property being a piece of land measuring 16,1881 hectares and other assets in a bid to recover its cash.
WMMI has since entered an appearance to defend notice and the matter is pending at the High Court.
