Fidelity Bank Takes Over Kano Disco, Two Others In Lingering Power Sector Crisis
*Kingsley Achife Appointed Interim MD For Ibadan Disco, Iboroma Akpana For PH Disco
Fidelity Bank Plc has taken over the board of three power distribution firms in one fell swoop, a critical sign that the power sector is in a deeper crisis than imagined.
The discos that have now lost their independence to Fidelity Bank are Kano, Benin, and Kaduna discos in the latest restructuring of the power sector by banks who provided them credits to finance their acquisition during the sector privatisation.
The trend started when UBA Plc took over the board of the Abuja Electricity Distribution Company, setting up new management and board to see to the day-to-day running of the enterprise.
In a similar manner, the Bureau of Public Enterprises (BPE), following the approval of the Nigerian Electricity Regulatory Commission (NERC) has appointed Kingsley Achife as the interim managing director of the Ibadan Electricity Distribution Company (IBEDC) which the Asset Management Corporation of Nigeria (AMCON) has since taken over.
Another in crisis is the Port Harcourt DISCO for which Iborama Akpana has been appointed as the chairman of the board to supervise the ongoing restructuring of the firm to forestall the imminent insolvency of the entity and support it to meet its market obligations.
The BPE and the NERC in a joint announcement stated that Fidelity has taken over the boards of the three power firms in the exercise of the rights on their shares
“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” stated both Sanusi Garba, the Executive Chairman NERC and Alex Okoh, the Director-General, BPE in a statement they jointly signed.
Fidelity Bank’s action has a contractual and commercial right owing to the agreement between the lender and the Core Investors in the Discos, while the BPE is involved because of the 40 per cent shareholding of the government in the Discos.
In view of the 40 per cent controlling shareholding of the federal government in the three power firms, the BPE and the NERC are to appoint interim managing directors while Fidelity Bank will appoint the chairmen and members of the boards for the transition period.
Both the NERC and BPE on an emergency basis activated the Business Continuity Process and have appointed interim Managing Directors in the affected DISCOs. They are Ahmad Dangana for Kano Disco, Henry Ajagbawa for Benin Disco and Yusuf Usman Yahaya for Kaduna Disco. Fidelity Bank has also appointed the following new board members for the affected three Discos.
For Kano Disco, Hasan Tukur is the Chairman while Nelson Ahaneku and Engr. Rabiu Suleiman are members.At the Benin Disco, the chairman is KC Akuma while both Adeola Ijose and Charles Owners are members. For the Kaduna Disco, Abbas Jega is the Chairman, and Ameenu Abubakar, together with Marlene Ngoyi are members.
BPE which controls 40 per cent shareholding of the affected entities on behalf of the federal government has also nominated Bashir Gwandu for Kano Disco, Yomi Adeyemi for Benin Disco and Umar Abdullahi for Kaduna Disco to the three boards during this transition.
For an orderly transition, both the BPE and the NERC are currently engaging with the Central Bank of Nigeria (as the banking sector regulator) 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 who are willing and able to re-capitalize and also manage the entities efficiently while Fidelity Bank has also given assurances to participate fully in all the ongoing market initiatives including the National Mass Metring Program aimed at improving the sector.
Similarly, 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 the Government on the Board alongside the DG of BPE.
As the ongoing restructuring of the Management and Board of Port Harcourt Disco progresses, 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 to forestall the imminent insolvency of the entity and also to support the entity to meet its market obligations.
Benson Uwheru will take over as the Interim Managing Director of PHEDC as part of the changes while the government will activate the 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, noted the bosses of NERC and the BPE.
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