The Bureau of Public Enterprises (BPE) has said that it is going with creating new management boards for the five power distribution companies (Discos) recently taken over by their creditors and currently undergoing restructuring.
Early in July, two commercial banks announced the takeover of five distribution companies (DisCos), pointing out that the ailing Discos failed to repay loans obtained to acquire assets during the 2013 privatization.
Two of the banks, Fidelity Bank and Afreximbank said they had already activated the call on the collateralized shares of Kano, Benin and Kaduna electricity distribution companies (DisCos).
Fidelity Bank reportedly wrote to the Bureau of Public Enterprises (BPE), which oversees the government’s 40% stake in the DisCos, that it has replaced the board members of the affected DisCos.
The banks explained that the decision to create new boards has impacted Benin Electricity Distribution Company (BEDC) and four other companies.
In equal measure, the remaining Discos boards were recreated in Kano, Kaduna, Ibadan, and Port Harcourt. However, the Federal High Court granted BEDC an interim order on July 8, 2022, to halt the board’s rebuilding process.
The order was obtained after the new boards had been formed on July 5, 2022, according to a statement released on Monday by the director-general of BPE, Alex Okoh.
The BPE boss said that “Following this unfortunate development, it has become imperative for Council (National Council on Privatization) to educate both the staff of BEDC and the public; particularly those within the BEDC franchise area comprising Edo, Delta, Ondo and Ekiti states of the steps taken by the Federal Government regarding the Board composition of the various Electricity Distribution Companies across the country which were concluded on July 2022.”
“Fidelity Bank informed Council, vide its Secretariat, the Bureau of Public Enterprises, that they have activated the call on the collateralised shares of Vigeo Power Limited in BEDC.
“Fidelity Bank’s action is a contractual and commercial intervention between the Core Investor (Vigeo Power Limited) and the lender. BPE is involved because of the 40% shareholding of the government in the BEDC.
“Federal Government, to safeguard the industry and also support the Market Stabilization through restructuring and repositioning to better serve the franchise area’s citizens, decided to appoint a new Board for BEDC.”
The BPE DG said what happened is a statute thing and that the Federal Government would make everything possible to protect the implementation of agreements.