Again, investors at loggerheads over ownership of DisCo
The crisis rocking the ownership of Abuja Electricity Distribution Company (AEDC) may be far from over, as one of the investors, CEC Africa Investments Limited (CECA), insisted that its partner, Xerxes Global Investment Limited breached a $41 million funding agreement for acquiring the DisCo in 2013.
While the Chairman of Xerxes Limited, Shehu Malami had reportedly said the crisis in the utility company was being fuelled by greed, adding that CECA ought to pay for facilitating the sale of AEDC to KANN Utility Company Limited, their consortium, the Managing Director of CECA, Emmanuel Katepa faulted the claim.
According to him, Xerxes Limited only relied on goodwill, which could not have bought the DisCo, stressing that there were financial obligations the bidders were expected to meet and this prompted CECA and Xerxes to agree on the financial arrangements, starting with the initial payment of $41m to the Bureau of Public Enterprises (BPE).
“Till date, Xerxes has not shown any capacity to repay its part of that obligation to CECA, six years after the privatisation. Yet it wants to claim major ownership of AEDC but has failed to fulfil any financial obligation and has left the business risk on CECA”, he added.
Malami failed to address the central issue which remains that he and his organisation are claiming shares for which they have failed to pay and show no capacity to pay.
“In recognition of its failure to pay its share of the acquisition cost in 2013, Xerxes even pledged to CECA, like security, half of its equity share in KANN.
At the time, the arrangement was expected to be cured within 120 days, during which time Xerxes was to source its contribution and pay its share. As we speak, Malami has not paid, yet is denying us the right to that majority equity stake,” Katepa noted.
According to him, it was on this basis that CECA and Xerxes went to the London Arbitration Court and secured a judgement in favour of CECA, adding that the award was further recognised in the High Court of Nigeria in February 2018.