Fidelity Bank takes control of 3 electricity companies over debt default

Fidelity Bank is to take over the boards of Kano, Benin and Kaduna distribution companies (DISCOs) and collateralise their shares.

Bureau of Public Enterprise (BPE) director-general Alex Okoh and executive chairman of the Nigerian Electricity Regulatory Commission (NERC) Sanusi Garba disclosed this in a joint statement on Wednesday.

“Today, we were informed by Fidelity Bank that they have activated the call on the collateralised shares of Kano, Benin and Kaduna (Fidelity and AFREXIM) DISCOs. “They have also initiated action to take over the boards of these DISCOs and exercise the rights on the shares,” said the statement.

“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 per cent shareholding of the government in the DISCOs.’’

The bureau lists the new board members for Kano DISCO as Hasan Tukur, (chairman); while Nelson Ahaneku, and Rabiu Suleiman are members. For Benin DISCO, K.C. Akuma is the board chairman while Adeola Ijose and Charles Onwera are members.

Abbas Jega will act as board chairman for Kano DisCo while Ameenu Abubakar and Marlene Ngoyi are members.

The BPE also nominated Bashir Gwandu (Kano), Yomi Adeyemi (Benin), and Umar Abdullahi (Kaduna) as independent directors to represent the government’s 40 per cent interest in the three DISCOs during the 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,” said the statement. “It is envisaged that the majority interest in the entities would be sold to capable private sector investors willing and able to re-capitalise and manage the entities efficiently.”

It explained that NERC and BPE “have also received assurances that Fidelity Bank will participate fully in all the ongoing market initiatives aimed at improving the sector (National Mass Metering Programme).”

The statement said in the interim, NERC and BPE met on an emergency basis and activated the business continuity process and appointed interim managing directors for the affected DISCOs.

They are Ahmad Dangana, Kano Disco, Henry Ajagbawa, Benin DISCO, and Yusuf Yahaya, Kaduna DISCO.

“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 will chair the board, Eberechukwu Uneze and Aminu Ismail as members, while Oluwaseyi Akinwale will represent the interest of the government on the board alongside the director-general 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 director-general of BPE will form the interim Board. ‘’

It said Mr Benson Uwheru would take over as the Managing Director of PHEDC as part of the changes.

The bureau assured government would support the activation of emergency funds through the Nigerian Electricity Market Stabilisation Facility.

“We are working with the 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,’’ the BPE said.