The United Bank for Africa has revealed plans to sell the Abuja Electricity Distribution Company to recover a $122m debt the Disco is owing it.
The lender had in December 2021 taken over the disco following the government’s approval.
The plan to sell was revealed at the bank’s audited 2022 results conference call (strategic review and outlook).
In December 2021, UBA took over AEDC over the inability of its major stakeholder, Kann Consortium, to service the $122m debt owed to the bank.
Kann Consortium secured a loan from UBA to acquire AEDC in 2013, making it to hold a 60 per cent stake in the Disco.
According to Bloomberg, the Executive Director, Risk Management and Finance, Ugochukwu Nwaghodoh, said that discussion about the sale of the Disco was at an advanced level.
Nwaghodoh was quoted as saying, “We are at advanced stage of discussion towards disposal and we believe that in the course of this year that will be totally consummated and we will be done with the full realisation of that asset.”
The takeover of the disco was a major loan default in the power sector privatisation drive of the Nigerian government.
Providing explanations on what led to the changes in the ownership structure and management at the AEDC, the Minister of Power, Abubakar Aliyu, as of December 2021, said the takeover of the Disco by the bank had to happen.
He said, “The AEDC has, of recent, been facing significant operational challenges arising from a dispute between the core investors (KANN Consortium) as owners of 60 per cent equity in the AEDC and UBA as lenders for the acquisition for the majority shareholding in the public utility.
“The situation has currently deteriorated due to a lack of access to intervention finances leading to a point whereby legitimate entitlements of the staff are being owed thus leading to service disruptions on December 6, 2021 within its franchise area.
Aliyu added, “The UBA, as a lender, and in exercising its rights over the shares of KANN Consortium in the AEDC, has taken over the shares of the obligor in the AEDC. This takeover of the majority stake in the AEDC by UBA has consequently led to the reported changes in the management of the AEDC.”
He said the changes in shareholding in the AEDC and the appointment of interim management for the Disco by the shareholders had been endorsed by the Nigerian Electricity Regulatory Commission and the Bureau of Public Enterprises (as co-shareholders in the AEDC).
The AEDC is the licensed utility that serves end-use electricity customers in Kogi, Nasarawa, Niger States and the Federal Capital Territory.