UBA takes over AEDC, as $122m debt forces investor, Kann Consortium out

The inability of Kann Consortium to service its debt owed to United Bank of Africa (UBA) has led the creditor to takeover Abuja Electricity Distribution Company (AEDC).

Kann Consortium had secured a $122 million from UBA to acquire AEDC in 2013, holding 60 percent stake in the disco firm, which makes Kann the majority stakeholder.

But in the last seven years, the debtor wasn’t able to pay up, leading to a dispute between UBA and Kann. In a bid to recover its fund, the lender triggered a takeover of the 60 percent stake.

This led to management changes and interim appointments following approval from other shareholders, Nigerian Electricity Regulatory Commission and the Bureau of Public Enterprises.

The recent development contradicted claims that President Muhammadu Buhari had sacked the management of AEDC after staff downed tools over non-payment of entitlements.

The protest had affected Kogi, Nasarawa, Niger states and the Federal Capital Territory, which are the locations served by AEDC, on December 6, 2021.

READ ALSO: Niger Govt orders closure of eight banks, AEDC office over alleged N456m tax debt

In a statement responding to the initial claim, the Minister of Power, Abubakar Aliyu, on Wednesday, 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 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.

“The Federal Ministry of Power has since taken the initiative to engage organised labour and electricity service has since been restored in the Federal Capital Territory and the states served by the AEDC.”

The minister explained that, “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.”

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