BOND SAVINGS & LOANS vrs RICE & SUGAR COMPANY LTD & 3 ORS

On or about 24th May 2013, the plaintiff/respondent (to be referred to hereafter as the plaintiff), a financial institution registered under the laws of Ghana granted a loan facility of GHC600,000.00 to support 1st defendant/appellant (to be referred to hereafter as 1st defendant), a retailing of rice and sugar business entity, by way of enhancing the 1st defendant’s working capital. The loan facility was to be paid back within 6 months.

1st defendant failed to make good its obligation under the loan agreement and as at 24th June 2016, the loan facility of GHC600,000.00 and the accrued interest had increased to GHC1,517,025.68. However, 1st defendant was constrained under the circumstance to negotiate restructuring of the payment of the indebtedness and actually requested for further grant of GHC315,000.00 to pay off 1st defendant’s indebtedness to Access Bank (GH) Ltd.

Subsequently, by a letter dated 27th June, 2016, 1st defendant was granted a restructured long term loan of GHC1,339,025.68 with a tenure of 48 months at an interest rate of 32% per annum and a penalty rate of 10% on any overdue amount till final payment.

The 1st defendant was obliged to make monthly repayments to discharge the restructured credit facility dated 27th June, 2016

The restructured loan of GHC1,339,025.68 was made up of GHC315,000.00 which was paid by plaintiff to Access Bank Ltd to pay off 1st defendant’s indebtedness to it and the sum of GHC1,024,025.68 which was a restructured balance from the 1st defendant’s prior existing indebtedness in respect of the earlier loan of GHC600,000.00.

The 2nd, 3rd and 4th defendants/appellants guaranteed the said loan by executing mortgage deed and other personal and corporate agreements respectively to that effect.

On 7th July 2016, the 4th defendant entered into an agreement with plaintiff by which the former would run advertisement for and on behalf of the latter as partial monthly repayments of the 1st defendant’s loan to plaintiff. The duration of this agreement was for 6 months starting from 1st August 2016 to 31st December 2016. It was further agreed that at the end of the initial 6 months agreement, any further extension would be agreed upon by the parties

During the duration of the said agreement, 1st defendant was to make monthly cash repayment of GHC10,000.00 from July 2016 and that was to be graduated to a monthly repayment of GHC20,000 in January 2017 in addition to the advertisement services provided by 4th def