The Federal Government said it was not responsible for the take over of the board of Abuja Electricity Distribution Company.
It explained how United Bank for Africa (UBA) Plc, took over the board and management of Abuja Electricity Distribution Company (AEDC) saying there had been ongoing dispute between the core investors, KANN Utility Company Limited (KANN) and UBA over the former’s inability to service its debt to the bank.
The Nigerian Electricity Regulatory Commission (NERC) and Bureau of Public Enterprises (BPE),in a joint statement, explained that the dispute eventually spilled over to a dispute with UBA, the lender that provided the acquisition loan to KANN for the acquisition of majority shares durng the privatisation exercise in 2013, over KANN’s inability to service its debt to the Bank.
The agencies said the trending narratives that Federal Government had sacked the management of AEDC was misrepresentations of facts and circumstances leading to the change in the composition of the AEDC board.
“The attention of the Nigenan Electric ty Regulatory Commission (NERC) and Bureau of Public Enterprises (BPE) has been drawn to misrepresentations in the press on the facts/circumstances leading to the change in the composition of the board of Abuja Electricity Distribution Plc or the “DisCo’). the licensed utility that serves end-use customers in Kogi, Nasarawa, Niger and the Federal Capital Territory
“The general public may wish to note that there has been an ongoing dispute amongst competing factions of AEDC’s majority shareholder/core investor 1.e KANN Utility Company Limited (KANN”), and this dispute eventually spilled over to a dispute with the lender that provided the acquisition loan to KANN for the acquisition of majority shares dunng the privatisation exercise in 2013, over KANN s inability to service its debt to the Bank.
“During the course of the intractable crisis, AEDC not only struggled to meet its obligat ons to the market under the terms and conditions of its licence but was also unable to meet its obligations to key stakeholders tn the organisation including staff culminatng in the industnal action by members of the Nigenan Union of Electncity 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 AEOC’s network area was only restored after the intervention of the Hon. Minister of Power, NERC and BPE following an agreement with the union on the terms for the suspension of the industrial action on 6th December 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 Pic, the lender exercised its rights by appointing a Receiver/Manager over KANN Stakeholders including NERC, Central Bank of Nigena (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 affars 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% equity in AEOC 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 faliure events and ensure continuity of service to end-use customers in the service area.
“The Federal Government remains committed to the ongoing initiatives on the recovery of the electricity sector but private investors should remain cognisant af their fiduciary responsibilities to their stakeholders especially in regulated utilities and should not act in a manner that jeopardizes public interest.
“NERC and BPE shall continue to work constructively with key stakeholders in the power sector to ensure contunued growth and service impravement under the reforms being embarked upon by the Federal Government for the socioeconomic growth of our great nation” reads the statement in parts.
