FG denies involvement in AEDC's mgt sack
December 9, 2021 Tope Sunday Business 0
The Federal Government, Wednesday, disclosed that it was not involved in the sack of the management of the Abuja Electricity Distribution Company (AEDC).
The FG's position was contained a statement jointly issued by the Bureau of Public Enterprises (BPE) and Nigerian Electricity Regulatory Commission (NERC).
The regulators stated that there was a protracted dispute between Abuja Electricity Distribution Company (AEDC) majority shareholder, KANN Utility Company Limited ("KANN") and United Bank for Africa (UBA) which culminated in the disruption of power supply to Nasarawa, Abuja, Kogi and parts of Edo states last Monday.
They clarified that UBA provided the acquisition loan to KANN (owners of AEDC) for the acquisition of majority shares during the privatisation in 2013.
The regulators added that KANN's inability to service its debt to UBA resulted in an intractable crisis between them to the extent that AEDC could not meet its obligation to staff.
This development, the statement, further explained, led to the industrial action last Monday.
To this end, the two regulatory bodies used the occasion to discountenance reports alluding to the fact that Federal Government appointed a new management board for AEDC.
According to the regulators, it was the lender that appointed a receiver/manager over KANN and not the Federal Government.
"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 on December 6, 2021.
"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. Stakeholders including NERC, Central Bank of Nigeria ("CBN") and BPE had on several times 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 is 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 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 BPE as part of measures designed to address business failure events and ensure continuity of service to end-use customers in the service area" the statement said.
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 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 BPE as part of measures designed to address business failure events and ensure continuity of service to end-use customers in the service area" the statement, noted. ENDS
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" the statement, noted.
Interim team
KANN by exercising its powers over the 60 per cent equity in AEDC
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