The United Bank for Africa (UBA) has announced plans to sell the Abuja Electricity Distribution Company (AEDC) to recover a debt of $122m owed to it by the company.
This move follows UBA’s takeover of the AEDC in December 2021, following the approval of the Nigerian government.
The inability of the AEDC’s major stakeholder, Kann Consortium, to service the debt led to UBA taking over the company. The consortium had secured a loan from UBA to acquire the AEDC in 2013, making it hold a 60% stake in the disco.
The Executive Director, Risk Management and Finance at UBA, Ugochukwu Nwaghodoh, revealed that discussions about the sale of the AEDC were at an advanced level during the bank’s audited 2022 results conference call. He added that he believed the sale would be “totally consummated” during the year.
The takeover of the AEDC was a major loan default in the Nigerian government’s power sector privatization drive. The Minister of Power, Abubakar Aliyu, had explained that the takeover was necessary due to the operational challenges faced by the company, arising from a dispute between the core investors (KANN Consortium) and UBA.
The UBA’s takeover of the majority stake in the AEDC led to changes in shareholding and the appointment of interim management for the company.
The changes were endorsed by the Nigerian Electricity Regulatory Commission and the Bureau of Public Enterprises, co-shareholders in the AEDC
The AEDC is a licensed utility that serves end-use electricity customers in Kogi, Nasarawa, Niger States, and the Federal Capital Territory.
The sale of the company is expected to help UBA recover its debt and also ensure better operational efficiency for the AEDC.