KEY POINTS
- Sahara Group denies claims that Ikeja Electric and Egbin Power are under receivership.
- Court rulings restrain creditors and their appointed receiver from enforcing loan terms.
- Experts say the incident underscores deeper financial instability and governance flaws in Nigeria’s power sector.
An advertisement claiming that FBNQuest Trustees Limited has placed Nigeria’s Ikeja Electricity Distribution Company and Egbin Power Plant under receivership has sparked controversy regarding the ownership of the companies.
According to the filing, which was made public earlier this week, Sahara Group’s main energy subsidiaries had defaulted on loan agreements, causing creditors to seize their assets.
However, Sahara Group, the conglomerate that owns Ikeja Electric and Egbin Power through subsidiaries, has categorically refuted the allegations, describing them as “malicious, deceptive, and false.”
According to the advertisement, senior advocate and insolvency specialist Kunle Ogunba was named Receiver/Manager of KEPCO Energy Resources Nigeria Ltd., which includes a 70% stake in Egbin Power Plc. Additionally, the advertisement advised debtors to protect assets under the purported receivership and urged creditors to submit proof of claims within 14 days.
Sahara Group quickly responded to the notice, claiming that it was an illegal attempt to seize assets under the pretense of self-help.
Court Ruling Blocks Receiver’s Action
In a strongly worded statement, Babatunde Osadare, Chief Legal and Regulatory Officer at Ikeja Electric, said that recent court rulings explicitly restrained the lender and its appointed Receiver/Manager from taking any action on the disputed debt.
According to Osadare, three separate rulings issued on August 5 by Justice Akintayo Aluko of the Federal High Court in Lagos barred the enforcement of any receivership or interference with the assets of Ikeja Electric, Egbin Power, and First Independent Power Limited (FIPL).
The court orders prohibit the acceleration of loan facilities, the freezing or interference with operational accounts, or any unilateral enforcement of loan security documents linked to the dispute.
“We state unequivocally that Egbin Power Plc, First Independent Power Limited, and Ikeja Electric Plc are absolutely not in Receivership,” Osadare said. “These claims are not only false, they misrepresent the facts and aim to sabotage due legal process.”
Sahara Group urged the public and financial partners to disregard what it described as a “gross misrepresentation of facts.”
The receivership dispute is the most recent development in Nigeria’s power sector’s turbulent history, which began with privatization in 2013 and has since been beset by enormous debt, pricing distortions, and inadequate infrastructure. In the last ten years, more than five power distribution companies (DisCos) have been placed under receivership as a result of growing debt and acquisition loan default.
The controversy, according to industry experts, highlights the government’s ongoing battle with electricity subsidies as well as the weakness of the power market. A system collapse could result from the federal government’s ₦4 trillion ($2.6 billion) debt for electricity subsidies, according to GenCos, including Sahara’s power entities.
“The situation highlights deep-rooted issues like flawed privatization, poor governance, unviable tariffs, and an unsustainable subsidy model,” said Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE).
