Electricity: AMCON explains reasons for take over of troubled Ibadan DisCo

*The Assets Management Corporation of Nigeria reveals it took over control of the Ibadan Electricity Distribution Company Limited because of the DisCo’s failure to repay a bank loan obtained to acquire the energy company’s assets eight years ago

Isola Moses | ConsumerConnect

Following the company’s failure to repay bank loans it obtained from former Skye Bank Plc, now Polaris Bank Limited, to acquire the energy properties eight years ago, the Assets Management Corporation of Nigeria (AMCON) has disclosed it decided to take over control of the distressed Ibadan Electricity Distribution Company (IBEDC) Limited

ConsumerConnect reports the IBEDC distributes electricity to consumers in Oyo, Osun, parts of Kwara, Ondo, Ekiti states in the country.

It was learnt after a court of law’s ruling empowering AMCON to take over the power utility asset, the IBEDC came under receivership Thursday, January 20, 2022.

Earlier, Integrated Energy Distribution and Marketing Limited (IEDML) had acquired the the electricity Distribution Company (DisCo) as well as Yola DisCo, all during the 2013 power sector privatisation exercise, according to report.

The IEDML later returned Yola DisCo to the Federal Government over insecurity issues in the franchise area at the time, report said.

However, another private company later took over the Yola DisCo from the Bureau of Public Enterprises (BPE) December 2021.

IEDML got 60 percent stakes in both DisCos to become the core investor, but the funding for the assets acquisition were loans obtained from banks, which reportedly, have had repayment issues eight years after acquiring IBEDC, in Ibadan.

Similarly, Abuja Electricity Company (AEDC), one of the 11 DisCos November 2021 also had acquisition loans settlement issues with the UBA Plc, thereby prompting UBA to takeover the DisCo in full receivership.

Appointment of assets receivership

Meanwhile, AMCON, in a public notice, has stated that it appointed Mr. Osayaba Giwa-Osagie, SAN, to take over the the entire undertakings, assets of IEDML, including shares and interests in related companies and entities, and also monies kept in any of the 25 banks in Nigeria.

According to the Corporation, AMCON executed the take over of IEDML, following a default in a Loan Servicing Agreement executed with Polaris Bank Limited.

It noted: “AMCON has pursuant to Section 48 and 61 of AMCON Act 2010 been appointed Receiver/Manager over all the Assets of Integrated Energy Distribution and Marketing Limited as stipulated in the instruments executed in favour of AMCON by virtue of the Loan Purchase and Limited Servicing Agreement executed with Polaris Bank Limited dated 30th November, 2018 and a Notice of Appointment of the Receiver/Manager dated August 6th, 2021, which was duly stamped by the Commissioner for Stamp Duties.”

The Nigerian Electricity Regulatory Commission (NERC) was said to have previously fined IBEDC N50million for “its failure to secure a refund of an interest-free loan the Board of IBEDC granted to its core investor group.”

AMCON won’t sack IBEDC Management and Staff, says COO

In the meantime, Engr. John Ayodele, Chief Operating Officer (COO) of IBEDC, in a memo to the staff said the Corporation would not sack the DisCo’s Management unlike the AEDC case, in which the Management and Board were reconstituted.

Engr. Ayodele stated: “Further to the judgement wherein the Federal High Court on the 8th of September, 2021, granted preservative orders in favour of Asset Management Corporation (AMCON), (being the Receiver/Manager of Integrated Energy Distribution and Marketing Limited); the court has appointed Mr. Kunle Ogunba Esq. SAN to act as Receiver/ Manager Nominee in the receivership action.

“Based on the foregoing, the Receiver/Manager came in today (20th January, 2022) to the IBEDC Headquarters to take charge formally, and subsequently met with the Management team.”

The IBEDC COO also said in the memo: “Therefore, I hereby wish to inform all staff that there is no cause for alarm.

“We are assured of job security which entails our position/ duties in the company, being entitlements to our salaries and other benefits, etc.”

Ayodele added: “On behalf of the Management, I urge us all to kindly go about the efficient discharge of our duties to ensure a speedy and mutually beneficial resolution.

“I wish us all the best, while I appeal that we continue to remember IBEDC in our prayers.”

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