UBA takes over Abuja Disco for loan default, appoints receiver/manager

The crises rocking the Abuja  Electricity Distribution Company (AEDC) over a loan default by the majority shareholder/core investor, Kann Utility Company Limited, may have taken a new dimension as the lender, United Bank for Africa (UBA), has appointed a receiver/manager for the troubled Disco.

AEDC is one of the 11 Discos unbundled from the defunct Power Holding Company of Nigeria (PHCN) and handed over to its core investor on November 1, 2013.

The utility rm serves enduse customers in its franchise areas covering Kogi, Nasarawa, Niger and the Federal Capital Territory.

Giving further insights into the crises rocking AEDC, Chairman of Nigerian Electricity Regulatory Commission (NERC), Mr. Sanusi Garba, and the Director General of Bureau of Public Enterprises(BPE), Mr. Alex Okoh, in a joint statement made available to Daily Sun, explained that there has been an ongoing dispute among competing factions of Kann, which eventually spilled over to a dispute with the lender(UBA) that provided the acquisition loan to Kann for the acquisition of majority shares during the privatization exercise in 2013, over Kann’s inability to service its debt to the bank.

NERC and BPE explained

that, during the course of the intractable crisis, AEDC not only struggled to meet its ob- ligations to the market under the terms and conditions of its licence but was also un- able to meet its obligations to key stakeholders in the organisation, including staff, culminating in the industrial action by members of the Nigerian Union of Electricity Employees (NUEE).

It added that the crisis eventually resulted in a total service disruption on December 6, 2021 for over 14 hours in AEDC’s network area, stat- ing that the provision of electricity 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 on December 6, 2021.

The statement further explained that arising from Kann’s inability to service its acquisition loan and the en- suing dispute over the servicing of the loan from UBA Plc, the lender exercised its rights by appointing a Receiver/ Manager over Kann.

It maintained that stake- holders, including NERC, Central Bank of Nigeria (CBN) and BPE had, on several occasions, worked to broker an amicable resolution between the contending parties. The protracted resolution of the dispute exacerbated the state of affairs at AEDC resulting in an industrial action and a total blackout in the service area for over 14 hours.

‘‘It then became apparent that decisive steps were required to address the matter and BPE agreed with the lender’s request to exercise its powers as Receiver/Manager over Kann by exercising its powers over the 60 per cent equity in AEDC as a means to recovering the acquisition loan granted by the bank.”

The statement further claried that 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 re- ported in some section of the media but on the basis of legal processes arising from the failure of the core investor in AEDC to meet its obligations to a lender.

It noted that the Receiver/ Manager has agreed to the appointment of an interim management team in conjunction with BPE as part of measures designed to address business failure events and ensure continuity of service to end-use customers in the service area. (Daily Sun)