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ABEDC’s investors divided over $41 million contract breach

CEC Africa Investments Limited has accused Xerxes Global Investment Limited of breaching its agreement that led to the acquisition of Abuja DisCo.

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TCN ready to waive Discos' N270 billion debt, TCN want Discos to recapitalise, Discos investment in power sector, National Union of Electricity Employees, Gencos want Discos’ job as it seeks to sell electricity directly to customers , Nigeria, Canada to ink new $2.3b power deal , ABEDC's investors divided over $41 million contract breach, Nationwide strike: Electricity workers meet with FG, as NECA fears lose-lose situation 

CEC Africa Investments Limited has accused Xerxes Global Investment Limited of breaching its agreement that led to the acquisition of Abuja Electricity Distribution Company. Both companies agreed to pay $41 million for their ownership of the DisCo but Xerxes Global Investment has defaulted on its part, asking CEC Africa Investment to consider its goodwill as a contribution.

According to a report, Xerxes Global failed to fulfil its monetary commitment to the acquisition which occurred in 2013. When the deal was signed, the company was said to have pledged half of its equity share in KANN Utility Company Limited to CEC Africa Investments as security.

Both Xerxes Global Investment and CEC Africa Investment are part of KANN Utility Company Limited, a consortium company that acquired Abuja Electricity Distribution Company. They are the major shareholders of the DisCo with 60% shares while the government owns 40%.

NERC, power, distribution, electricity, companies, Recapitalisation of Discos, Power Distribution Companies to retain 132/330 kV customer - NERC , FG takes over Yola DisCo, investors to get N26.9 billion refund  

Does goodwill buy company? Punch reported that the Chairman, Xerxes Global, Ambassador Shehu Malami, said his goodwill should be considered as the company’s contribution. According to him, his goodwill was not valued by CEC Africa Investment.

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Malami said his goodwill guaranteed the sale of Abuja Electricity Distribution Company to KANN Utility Company. He added that greed was behind the crisis rocking KANN. However, the Managing Director, CEC Africa Investment, Emmanuel Katepa, said goodwill doesn’t buy a company.

[READ MORE: DisCos fail to distribute 8,848.24 megawatts of electricity – TCN]

Katepa said the goodwill didn’t lead to the acquisition of the Abuja DisCo as claimed by Malami. He said Xerxes Global investment had left his company to bear the burden of the $41 million acquisition fee alone without showing any desire to meet its own financial obligation which is to be paid to the Bureau of Public Enterprises (BPE).

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“Till date, Xerxes has not shown any capacity to repay its part of that obligation to CEC Africa, six years after the privatisation.

“Yet it wants to claim major ownership of the AEDC but has failed to fulfil any financial obligation and has left the business risk on CEC Africa.”

Katepa added, “Ambassador Shehu Malami failed to address the central issue which remains that he and his organisation are claiming shares for which they have failed to pay and show no capacity to pay.

“In recognition of its failure to pay its share of the acquisition cost in 2013, Xerxes even pledged to CEC Africa, as security, half of its equity share in KANN.”

Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

1 Comment

1 Comment

  1. Anu

    December 7, 2019 at 6:29 am

    Amb Malami is probably insinuating that he influenced the sale of Abedc to them.This is the fraudulent privatization that was done in the last administration. This is one of the major reasons Nigerians do not have light. The so called investors just lack the financial muscle to invest and turn around electricity in govt.

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Energy

NNPC says local operators must improve capacity to achieve low cost of oil production

The NNPC has mandated local oil companies to improve capacity to so as to reduce oil production cost.

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NNPC unveils covid-19 contacts tracing app, marketers to buy petroleum products online

The Nigerian National Petroleum Corporation (NNPC) has said that indigenous companies operating in Nigeria’s oil and gas sector must upscale their capacity for global competitiveness in order to achieve the target of reducing the cost of oil production in Nigeria on a sustainable basis.

This was disclosed by the Group Managing Director of NNPC, Mallam Mele Kyari, at a virtual stakeholder’s consultative summit which was organized by the Senate Committee on Local Content.

According to a press release by NNPC, which was signed by its Group General Manager, Group Public Affairs Division, Dr. Kennie Obateru, the NNPC GMD said that there was need to amend the Local Content Act to reflect current realities in the industry.

Kyari, who was represented by the Group General Manager, Corporate Planning & Strategy (CP&S), Mrs Eyesan Oritsemeyiwa, argued that there was a need to have a legislation to resolve the issues of funding challenges faced by local players, stressing that oil and gas business required high technical skills and competence to compete favourably at the global stage.

Speaking further on the need for greater capacity building on the part of indigenous companies, the GMD said the nation’s education system has a great role to play in the development of highly skilled technical manpower, adding that any legislation on Nigerian content development that fails to embrace issues of investment in the educational system was not likely to achieve much.

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He said, “In terms of the interaction between industry and education, we think these new bills would present a good model that we should work with. People are the greatest assets of any nation. If you have the best brains in the industry today, as long as you are not getting a good replacement for them from the educational sector when they grow old and retire, then your industry will collapse,”

The NNPC boss pointed out that the nation has made some good progress from the era when there was no single indigenous operator in the oil and gas industry to the current situation where local operators have risen to double digits, stressing that the trend should be encouraged.

He praised the National Assembly’s initiative to review and amend the Local Content Act and urged the committee to ensure that it is carried out in a timely fashion in order for the law to deliver maximum value for the nation.

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The GMD commended the legislators for the plan to extend the local content law beyond the oil and gas industry to other sectors of the nation’s economy, stressing that it would open up the non-oil sectors to growth and development.

The local content initiative has been identified as being very critical to the development of Nigeria’s oil and gas sector as the Federal Government plans to reduce the cost of production of crude oil to $10 per barrel in the face of the recent crash in crude oil prices.

The Federal Government has provided the sum of $350 million as the Nigerian Content Intervention Fund to help support local participation in the oil and gas sector.

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Energy

NNPC signs gas development and commercialization deal with SEEPCO

NNPC and SEEPCO have signed a gas development and commercialization deal.

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FG to give up majority stakes in its 4 refineries, to be privately managed, NNPC, Pipeline Vandalism: Stakeholder collaboration, critical to tame menace - Kyari, Nigeria explains when it will fully comply with OPEC+ output cut

The state oil giant, Nigerian National Petroleum Corporation (NNPC) has signed a gas development deal with Sterling Exploration and Energy Production Company (SEEPCO).

The agreement between the 2 oil firm is for the development and commercialization of gas from Oil Mining Lease (OML) 143 that could help reduce gas flaring in the country.

The disclosure was contained in a press statement that was issued by the Group General Manager, Group Public Affairs Division of NNPC, Dr Kennie Obateru, on Saturday, September 26, 2020, in Abuja.

According to the statement, the Group Managing Director of NNPC, Malam Mele Kyari, while speaking at the agreement-signing ceremony which held at the NNPC Towers, described the execution of the deal as a great milestone as well as a testament to NNPC’s commitment to facilitating the nation’s transformation into a gas-powered economy.

Kyari disclosed that the deal would not only help reduce gas flaring and its environmental hazards but would also promote gas production and utilization in the domestic market.

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The NNPC boss also commended SEEPCO for its unwavering commitment to gas development and commercialization in the country which has led to the establishment of a Special Purpose Vehicle that will help expand gas utilization in the country as a cleaner, cheaper and more reliable alternative form of energy.

On his part, the Chairman of SEEPCO, Mr Tony Chukwueke, described the deal as an essential partnership that would help the company fulfil the pledge it made to support the efforts of the Nigerian government to eliminate gas flaring by monetizing it.

He commended NNPC and the Group Managing Director for ensuring the execution of the agreement which he described central to the achievement of the company’s cardinal objective of boosting the production of Liquefied Petroleum Gas (LPG), condensate and dry gas for the Nigerian market, adding that the company has invested about $600 million for that purpose.

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This is coming at a time when the Federal Government is shifting focus to gas utilization as an alternative source of energy especially with the increase in the retail pump price of petrol. This is one of the various initiatives by the government as represented by the NNPC towards providing alternative sources of energy.

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Energy

Buhari reappoints 3 Chief Executives of agencies under Federal Ministry of Petroleum

3 Chief Executive Officers of agencies under the Federal Ministry of Petroleum Resources have been reappointed.

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BREAKING: President Buhari retains portfolio as Petroleum Minister

President Muhammadu Buhari has renewed the appointment of 3 Chief Executive Officers of parastatals under the Federal Ministry of Petroleum Resources with immediate effect.

The appointments that were renewed by the president include that of Dr Bello Aliyu Gusau as the Executive Secretary of Petroleum Technology Development Fund (PTDF), Ahmed Bobboi as the Executive Secretary/Chief Executive Officer of Petroleum Equalization Fund (PEF) and Simbi Wabote as Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB).

The disclosure was made through a series of tweet posts by the presidency on its official Twitter handle on Friday, September 25, 2020.

The statement disclosed that the renewal of the appointments followed recommendations to the President by the Minister of State Petroleum Resources, Timipre Syla.

It stated that Dr Aliyu Gusau was credited to have run the PTDF successfully in the past four years, keeping faith with the Seven Strategic Priorities he had introduced in January 2017.

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These are Domestication, Cost cutting, Sustainable funding, Efficient internal processes, Linkages with the industry, Utilization of centres of excellence, and Pursuit of home-grown research.

It also stated that Bobboi got his reappointment for having run PEF in a way that made it a key and strategic player in the administration’s oil and gas reforms, especially in stabilizing the supply and distribution of petroleum products across the country, among others.

Going further, it stated that the NCDMB boss, Wabote, won his pips for managing the NCDMB and completing its headquarters building. Wabote was also credited to have initiated many landmark projects that were widely commended by industry players.

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