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Fidelity Bank, Afreximbank take over Benin, Kano DisCos

Fidelity Bank, Afreximbank take over Benin, Kano DisCos
July 06
11:31 2022

The federal government says Fidelity Bank Plc has commenced plans to finalise the takeover of Benin, Kano and Kaduna electricity distribution companies (DisCos).

Sanusi Garba, chairman, Nigerian Electricity Regulatory Commission (NERC) and Alex Okoh, director-general, Bureau of Public Enterprises (BPE), said this in a statement on Tuesday.

They said said the action followed the activation of collateralised shares of the DisCos by Fidelity Bank and African Export-Import Bank (Afreximbank).

The regulators also announced the restructuring of two other electricity distribution companies, namely Ibadan Electricity Distribution Company (IBEDC) and Port Harcourt Electricity Distribution Company (PHED).

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The statement was titled, “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,” the statement reads. 

It said Fidelity Bank’s action was a contractual and commercial intervention, following an agreement between the core investors in the DISCOs and the lender. 

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“BPE is involved because of the 40% shareholding of government in the DISCOs,” the statement added. 

It said Fidelity Bank informed BPE and NERC that the new board members of the Kano DISCo were Hasan Tukur, chairman; Nelson Ahaneku, member and Rabiu Suleiman, member, according to the statement.

Also, KC Akuma, chairman; Adeola Ijose, member and Charles Onwera; member, were said to be new board members for Benin DisCo, while Abbas Jega, chairman; Ameenu Abubakar, member and Marlene Ngoyi, member; as board members of Kaduna DisCos.

The FG said BPE had 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”. 

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“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,” the statement reads. 

“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.

“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 said they met on an emergency basis and “activated the Business Continuity Process and have appointed interim Managing Directors in the affected DISCOs”.

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They are Ahmad Dangana, Kano DISCo; Henry Ajagbawa, Benin DISCo and Yusuf Usman Yahaya, Kaduna DISCo. 

On the takeover of Ibadan DisCo by Asset Management Corporation of Nigeria (AMCON), the BPE said it obtained approval from NERC to appoint Kingsley Achife as the interim managing director. 

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AMCON took over the IBEDC in January 2022 over insolvency.

“In a temporary capacity, the leadership of AMCON will be a placeholder Board for the Ibadan franchise (Ahmed Kuru as chairman, while Eberechukwu Uneze and Aminu Ismail will serve as members). Oluwaseyi Akinwale will represent the interest of government on the board alongside the DG of BPE,” the statement said.

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The statement added that the regulators have also restructured 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. Benson Uwheru will take over as the Managing Director of PHEDC as part of the changes,” it said. 

“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.”

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