The Bureau of Public Enterprises (BPE) has announced a 5-member interim management team for the Abuja Electricity Distribution Company (AEDC) following the crisis rocking the Distribution Company.
This was disclosed in a statement by Amina Othman, Head, Public Communications, on Thursday in Abuja, according to the News Agency of Nigeria.
The BPE added that the Nigerian Electricity Regulatory Commission (NERC), has also approved the appointment of the interim management team.
What they are saying
The BPE stated that the interim management would be chaired by Bada Akinwumi as Interim Managing Director, Sani Usman as Interim Chief Business Officer, and Babajide Ibironke as Interim Chief Finance Officer. Other members include Donald Etim as Interim Chief Marketing Officer, and Femi Zacchaeus as Interim Chief Technical Officer.
Chairman of NERC, Sanusi Garba, said the development is in pursuance of the earlier fit and proper review of BPE’s pool of nominees and in the context of business continuity framework of the Nigerian Electricity Supply Industry (NESI).
“NERC and BPE, in a joint statement on Wednesday, signed by Sanusi Garba and Alex Okoh, Director General of BPE, stated that there had been an ongoing dispute amongst competing factions of AEDC’s majority shareholder/core investor KANN Utility Company Limited (KANN).
“The dispute eventually spilled over with the lender that provided the acquisition loan to KANN for the acquisition of majority shares during the privatisation exercise in 2013, over KANN’s inability to service its debt to the bank.
“The United Bank for Africa (UBA) had acted as Mandated Lead Arranger, underwriting the entire facility of US$ 122 million (about N20 billion) for KANN Utilities acquisition of AEDC,” the statement said.
The BPE added that AEDC has struggled to meet not only its debt obligations but also obligations to its staff, which resulted in a strike action by members of the Nigerian Union of Electricity Employees (NUEE).
“Eventually, this resulted in a total service disruption on Dec. 6, for over 14 hours in AEDC’s network area,” they said
“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 Dec. 6.
“The public should note that arising from KANN’s inability to service its 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 the BPE had on several times worked to broker an amicable resolution between the contending parties,” the statement added.
They added that the action to appoint an interim team to manage AEDC was not done on the basis of a directive from the Federal Government but on the basis of legal processes arising from the failure of the core investor in AEDC to meet its obligations to a lender.
What you should know
Recall Nairametrics reported earlier that the Ministry of Power, Nigerian Electricity Regulatory Commission (NERC) and Bureau of Public Enterprise (BPE) cleared the air on the recent crisis in the ownership structure of Abuja Electricity Distribution Company Plc (AEDC).
According to them, the DisCo has been facing significant operational challenges arising from a dispute between the core investors (KANN Consortium) as owners of 60% equity in AEDC and the UBA as lenders for the acquisition for the majority shareholding in the public utility.
