United Bank of Africa (UBA) has taken over Abuja Electricity Distribution Company (AEDC) over failure of its major shareholder to payback a loan.
A statement jointly signed by Sanusi Garba, Chairman, Nigerian Electricity Regulatory Commission (NERC) and Alex A. Okoh, Director-General, Bureau of Public Enterprises said UBA is now in receivership of the power distribution company to recover it loan it gave AEDC major shareholder, KANN Utility Company Limited.
AEDC, managed by KANN, had been failing to redeem the 2013 loan facility and other commitments, the statement said.
There has also been a struggle the bank and AEDC over breach of contract.
“During the course of the intractable crisis, AEDC not only struggled to meet its obligations to the market under the terms and conditions of its license but was unable to meet its obligations to key stakeholders in the organisation including staff culminating in the industrial action by Nigerian Union of Electricity Employees (NUEE)” which caused the power outage on December 6.
AEDC workers under the aegis of NUEE shut down electricity on Monday over failure of the Central Bank of Nigeria to remit N41 billion in allowances and entitlement owed workers.
The regulators noted that the breach of contract prompted UBA’s drastic decision to take over 60 per cent equity in the distribution company and appoint an interim manager to oversee AEDC’s affairs.
“The general public should note that arising from KANN’s inability to service the acquisition loan and the ensuing dispute overhead servicing of the loan from UBA Plc, the lender exercised its rights by appointing a Receiver/Manager over KANN.”
The statement also clarified that the interim team was not appointed at the government’s directive but “on the basis of legal processes arising from the failure of the core investor I AEDC to meet its obligations to a lender.”
The decision is not expected to negatively impart on subscribers as NERC said the measure was taken to “ensure continuity of service to end-use customers in the service area.”
AEDC supplies electricity to Abuja, Nasarawa, Niger and Kogi states.