As controversy trails ownership status of the Abuja Electricity Distribution Company (AEDC), the major equity holder of KANN Nigeria Limited, the consortium that acquired the 60% equity stake of the Abuja Electricity Distribution Company (AEDC), CEC Africa has reacted that it would neither pull out nor divest its shares.
The Company said it’s aware of harassment by cabals and spy agency’s pressure on them.
The foreign investor instead reinstated its total commitment towards providing improved and efficient electricity services to customers in Abuja, the Federal Capital Territory (FTC).
This was a reaction by the Managing Director of CEC Africa, Mr. Emmanuel Katepa in a chat with newsmen yesterday in Abuja.
“The news that CEC Africa, majority shareholder in KANN Utility Company Limited, the consortium that acquired the 60% equity stake of the AEDC plans to pull out its investment and move out Nigeria is false and fake. CEC Africa has no such plans or whatsoever to quit Nigeria’s power sector market”, Mr. Emmanuel Katepa told reporters.
A recent newspaper publication quoting an anonymous source reported that “The core investor in Abuja Electricity Distribution Company, KANN Utility Company Limited, a 50 percent joint venture of the Copperbelt Energy Corporation plc (CEC), a leading Zambian energy company, is pulling out of the Abuja Electric and the new owner could be a logistics firm that transports fertiliser for the Federal Government”.
However, CEC Africa has since refuted the information saying that “as owners of 75% equity stake of KANN, CEC Africa is in the better position to decide whether it wants to pull out of KANN and Abuja Electricity Distribution Company or remain. But at the moment, we have not taken such a decision; we are still in operation and are determined to provide improved services to our customers in the Federal Capital Territory (FCT), Abuja”.
Finding showed that the two companies agreed that CECA and Xerxes would own and hold 50% each of the shares of KANN and that each of the two parties would make equal financial contribution towards the acquisition amount and costs with regard to the purchase of 60% shares of AEDC.
The two companies also agreed to fund 25 percent of the AEDC equity share by cash contributions in their 50%/50% shareholding interest and KANN would borrow the remaining 75% of the acquisition costs of $123 million from a third party lender.
However, Xerxes could not raise its equity contribution when the Bureau of Public Enterprises (BPE) demanded for the initial 25% upfront payment; CECA alone raised initial 25% equity payment fully in March 2013.
It was also gathered that Xerxes could not also guarantee the 75% balance of loan repayment, thus CECA provided a mandatory Debt Service Reserve Account of as a security cover for the UBA loan.
Notably, however, to secure this repayment, XerXes pledged 25% out of its 50% shareholding in KANN to CECA thus making the later (CECA) becoming 75% equity owner of KANN in a written agreement, according to the arguments contained in the the court case.
But now, CECA, in its claim to the court with documentary evidences, is alleging that apart from the fact that Xerxes has failed to honour its agreements with CECA on equity ownership of KANN on 75% and 25% basis, Xerxes is systematically sidelining CECA, plotting takeover of AEDC by trying to change key management positions and leave CECA, the biggest investor in denial.
But the second party allegedly failed to honour agreement it entered into with CEC Africa, a disagreement that took them to the London Court of International Arbitration (LCIA) and the Federal High Court siting in Abuja wherein in the two instances CEC Africa won its cases.
Sources however revealed that a powerful vested but disgruntled interest within the KANN consortium was behind the fake news so as to create confusion and wrong impression about CEC Africa.
A reliable source close to CEC Africa who pleaded anonymity disclosed that a “powerful individuals, economic saboteurs who don’t want to obey Nigerian laws and business agreements wants to hijack the company from the majority shareholder, CEC Africa.
“These people are the ones frustrating the power policy target of President Muhammadu Buhari to provide improved, stable and sustainable electricity services to Nigerians”, he said.