The Nigerian Electricity Regulatory Commission (NERC) and the Bureau of Public Enterprises (BPE) on Tuesday disagreed with a statement by the Minister of State, Power, Mr Goddy Jedy-Agba, that the Federal Government effected the sack of the management board of the Abuja Electricity Distribution Company (AEDC).
Rather, the NERC and BPE, in a release jointly signed by the Chairman of the power sector regulator, Sanusi Garba, and the Director General of the BPE, Alex Okoh, stated that the lending bank (UBA) only exercised its rights over the shares of KANN consortium, part owners of AEDC.
A statement on Tuesday by a media aide to the minister of state, Ofem Uket, titled ‘FG Sacks Management of AEDC, Approves Interim Governing Council’, had announced that the sack of the management team was conveyed by the presidency to the Federal Ministry of Power.
“President Muhammadu Buhari has approved the suspension of the management of AEDC and a new interim governing board appointed to oversee the day-to-day operations of the electricity distribution company.
“This followed the recent industrial action embarked on by its staff over non-payment of arrears of pensions, allowances, salaries and promotion.
“The sack of the management team conveyed by the presidency to the Federal Ministry of Power takes immediate effect,” the statement by Uket had indicated.
But the joint statement described the report as “misrepresentations” in the circumstances leading to the change in the composition of the board of the licenced utility, which serves end-use customers in Kogi, Nasarawa, Niger and the Federal Capital Territory (FCT).
It stated that there had been a dispute amongst competing factions of AEDC’s majority shareholder/core investor, KANN Utility Company Limited, stressing that the dispute eventually spilled over to a dispute with the lender that provided the acquisition loan to KANN.
According to NERC and BPE, the matter later deteriorated over KANN’s inability to service its debt to the bank.
During the course of the intractable crisis, the statement said that the AEDC not only struggled to meet its obligations to the market under the terms and conditions of its licence but was also unable to meet its obligations to key stakeholders in the organisation, including staff.
The NERC and BPE explained that this culminated in the industrial action by members of the Nigerian Union of Electricity Employees (NUEE).
“Eventually, this resulted in a total service disruption on 6th December 2021 for over 14 hours in AEDC’s network area. The provision of electricity supply in AEDC’s network area was only restored after the intervention of the minister of power, NERC and BPE following an agreement with the union on the terms for the suspension of the industrial action.
“The general public should note that arising from KANN’s inability to service its acquisition loan and the ensuing dispute over the servicing of the loan from UBA Plc., the lender exercised its rights by appointing a receiver/manager over KANN,” it noted.
However, it added that stakeholders, including NERC, the Central Bank of Nigeria (CBN) and BPE had on several times worked to broker an amicable resolution between the contending parties.
It noted that the protracted resolution of the dispute exacerbated the state of affairs at the AEDC, resulting in an industrial action and a total blackout in the service area for over 14 hours.
According to the statement, it then became apparent that decisive steps were required to address the matter wherein the BPE agreed with the lender’s request to exercise its powers as receiver/manager over KANN.
It explained that this development included exercising its powers over the 60 per cent equity in AEDC as a means to recovering the acquisition loan it granted.
“The action to appoint an interim team to manage AEDC was not done on the basis of a directive from the federal government as being falsely reported in the press but on the basis of legal processes arising from the failure of the core investor in AEDC to meet its obligations to a lender.
“The receiver/manager has agreed to the appointment of an interim management team in conjunction with the BPE as part of measures designed to address business failure events and ensure continuity of service to end-use customers in the service area,” it stressed.
It assured its stakeholders that the federal government remains committed to the ongoing initiatives on the recovery of the electricity sector but added that private investors should remain cognisant of their fiduciary responsibilities to their stakeholders.
The NERC and BPE stated that this is especially in regulated utilities which should not act in a manner that jeopardises public interest.
“NERC and BPE shall continue to work constructively with key stakeholders in the power sector to ensure continued growth and service improvement under the reforms being embarked upon by the Federal Government for the socioeconomic growth of our great nation,” the joint statement said.
In a separate release, the Minister of Power, Abubakar Aliyu, noted that the AEDC had, of recent, been facing significant operational challenges arising from a dispute between the core investors as owners of 60 per cent equity and the UBA as lenders for the acquisition for the majority shareholding.
“The situation has currently deteriorated due to lack of access to intervention finances leading to a point whereby legitimate entitlements of the staff are being owed thus leading to service disruptions within its franchise area.
“The Federal Ministry of Power has since taken the initiative to engage organised labour and electricity service has since been restored in the FCT and the states served by AEDC. The UBA, as a lender, and in exercising its rights over the shares of KANN consortium in AEDC, has taken over the shares of the obligor in the company. This takeover of the majority stake in AEDC by UBA has consequently led to the reported changes in the management of the company.
“The changes in shareholding in AEDC and the appointment of an interim management for AEDC by the shareholders has been endorsed by NERC and the BPE,” the minister said.
(THISDAY)
About the Author
851242 699291Music began playing anytime I opened this website, so irritating! 243697
389510 634801really nice post, i certainly enjoy this fabulous website, persist with it 70902