Mixed Reactions Trail  Restructuring Of Benin. Ibadan, Three Other DisCos By FG

Regarding it as belated, the stakeholders further argue that it was obvious to many Nigerians that the composition of some of the boards of the firms was bad right from the beginning.

They further argue that some of the firms could not even pay the privatisation fee and the action exposed them to other interests that are currently on their boards.

Some of the affected firms were reported years ago about their alleged ‘extra vagant’ life styles by their board members, paying their members in foreign currency while their accounts were in red.

“It is public knowledge that some of the firms abandoned debt/revenue collection from the beginning because of the fixed amount federal government was giving them from the beginning,“ says Friday Ameh, Lagos based analyst.

“We agree with their arguments initially that the infrastructure was and even, now, obsolete, but was there no due deligence to have prepared for such challenges,?

“we are also aware that the privatisation exercise was shrouded in secrecy and not transparent.

The actors are still alive and either in government or aspiring, but nothing has been done, “ says another stakeholder.

They further observe that the Central Bank of Nigeria (CBN) and other regulatory and anti-corruption agencies should have waded into the crisis before now rather than waiting until banks start reacting to non servicing of loans before the current action.

“Banks submit monthly and quarterly returns on their operations to CBN, and so the regulatory bank cannot absolve itself from the current mess the country is experiencing and the passing of the burden to consumers, “ says an analyst.

Nonetheless, other stakeholders commend the belated action saying, it would go along way in saving investments if some people or corporate organisations.

“Though belated, the action will send warning signals to others that are enmeshed in similar crisis and that the strong arm of the law will catch up with them one day. It’s a matter of time. Governments will not sleep forever, “ says a concerned consumer

The Nigerian government has announced the dissolution of the boards of five electricity distribution companies.

This was contained in a statement jointly signed on Tuesday by the Executive Chairman of the Nigerian Electricity Regulatory Commission (NERC), Sanusi Garba, and Director-General of the Bureau of Public Enterprises (BPE), Alex Okoh.

According to them, the affected companies are Kano Electricity Distribution Company (KEDCO), Ibadan Electricity Distribution Company (IBEDC), Benin Electricity Distribution Company (BEDC), Kaduna Electric, and Port Harcourt Electricity Distribution Company (PHED).

Garba and Okoh explained that the announcement followed Fidelity Bank’s activation of the call on the collaterised shares of KEDCO, BDEC, and Kaduna Electric over their inability to repay loans obtained to pay for assets acquired in the 2013 privatisation exercise.

They added that the Asset Management Corporation of Nigeria (AMCON) would be a placeholder board for IBEDC in a temporary capacity while the PHED undergoes restructuring to prevent its imminent insolvency.

The NREC and BPE chiefs said the new boards for the affected discos have been approved and the bureau was collaborating with the Central Bank of Nigeria (CBN) and the Ministry of Power to ensure no service disruptions during the transition.

Read the statement announcing the restructuring below:

RESTRUCTURING OF KANO, BENIN, KADUNA, IBADAN, AND PORT HARCOURT DISCOs

Today we were informed by Fidelity Bank that they have activated the call on the collateralized shares of Kano, Benin, and Kaduna (Fidelity and AFREXIM) DISCOs and that they have initiated action to take over the Boards of these DISCOs and exercise the rights on the shares.

Fidelity Bank’s action is a contractual and commercial intervention and is between the Core Investors in the DISCOs and the lender. BPE is involved because of the 40% shareholding of Government in the DISCOs. Fidelity Bank has informed us that the new Board members of the affected DISCOs will be as follows:

–              Kano DISCO: Hasan Tukur (Chairman), Nelson Ahaneku (Member), Engr. Rabiu Suleiman (Member)

–              Benin DISCO: KC Akuma (Chairman), Adeola Ijose (Member), Charles Onwera (Member)

–              Kaduna DISCO: Abbas Jega (Chairman), Ameenu Abubakar (Member), Marlene Ngoyi (Member)

BPE has nominated Bashir Gwandu (Kano), Yomi Adeyemi (Benin), and Umar Abdullahi (Kaduna) as independent Directors to represent Government’s 40% interest in the three DISCOs respectively, during this transition.

We are engaging with the Central Bank of Nigeria (as the banking sector regulator) to ensure an orderly transition and to ensure that Fidelity Bank does not hold the DISCOs’ shares in perpetuity.

It is envisaged that the majority interest in the entities would be sold to capable private sector investors willing and able to re-capitalize and manage the entities efficiently.
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We have also received assurances that Fidelity Bank will participate fully in all the ongoing market initiatives aimed at improving the sector (e.g. National Mass Metering Program).

In the interim, NERC and BPE met on an Emergency Basis and activated the Business Continuity Process and have appointed interim Managing Directors in the affected DISCOs.

Kano Disco – Ahmad Dangana
Benin Disco – Henry Ajagbawa
iii.            Kaduna Disco– Yusuf Usman Yahaya

Also, with the takeover of Ibadan DISCO by AMCON, the BPE has obtained approval from NERC to appoint Kingsley Achife as the interim Managing Director.

In a temporary capacity the leadership of AMCON will be a placeholder Board for the Ibadan franchise (Ahmed Kuru – Chair, Eberechukwu Uneze – Member, Aminu Ismail – Member). Oluwaseyi Akinwale will represent the interest of Government on the Board alongside the DG of BPE.

Lastly, we are re-structuring the Management and Board of Port Harcourt DISCO to forestall the imminent insolvency of the entity.

As a condition for support to the entity to meet its market obligations, Iboroma Akpana will take over as the Chairman of the Board. Emmanuel Okotete, Eyo Ekpo, Ismaila Shuaibu and the DG of BPE will form the interim Board. Mr. Benson Uwheru will take over as the Managing Director of PHEDC as part of the changes.

Government will support the activation of Emergency funds through the Nigerian Electricity Market Stabilization Facility to support the entity while it goes through restructuring and repositioning to serve the citizens of the franchise area better.

We are working with the Honourable Minister of Power to ensure no service disruptions during these transitions. We remain committed to supporting the Nigerian Electricity Supply Industry to serve Nigerians better.

Sanusi Garba      Alex A. Okoh

EXECUTIVE CHAIRMAN NERC      DIRECTOR GENERAL, BPE