The Nigerian Electricity Regulatory Commission, on Monday, announced the dissolution of the board of directors of Kaduna Electricity Distribution Company over the Disco’s inability to pay N110bn debt owed to the Nigeria Electricity Supply Industry.
In a regulatory order dated January 1, 2024, and signed by the Chairman and Vice Chairman of NERC, Sanusi Garba, and Musiliu Oseni, respectively, the commission stated that the board of the firm had been dissolved, as it also commenced moves to sell the power firm.
Kaduna Disco is among five Discos that were taken over by their funders after the core investors were unable to pay back the borrowed funds used to acquire the company during privatisation in 2013.
In July 2022, the Federal Government announced the planned takeover of Kano, Benin and Kaduna electricity distribution companies by Fidelity Bank Plc after the bank initiated action to take over the boards of the three Discos.
It had also announced through the Bureau of Public Enterprises that with the takeover of Ibadan Disco by the Asset Management Corporation of Nigeria, the BPE had obtained approval from NERC to appoint an interim managing director for the distressed power firm.
The government had further stated in a restructuring notice issued at the time, that it was restructuring the management and board of Port Harcourt Disco to forestall the imminent insolvency of the utility. The notice was signed by the Director-General, BPE, Alex Okoh; and Executive Chairman, NERC, Sanusi Garba.
Industry operators stated that since that time, Kaduna Disco had been facing liquidity challenges, which resulted to the dissolution of its board by NERC as announced by the commission on Monday.
Recall that the Managing Director of the company, Yusuf Yahaya, had announced his resignation from the company on Saturday.
In its order released on Monday, the power sector regulator stated that Kaduna Disco was owing N110bn to the Nigerian Bulk Electricity Trade and the Market Operator of the Transmission Company of Nigeria since 2015 till date.
It said the receivership, headed by Afrexim bank, had been given 60 days notice to state why its licence should not be cancelled with another 30 days given in July last year.
The commission said the bank requested for four to six months to finalise the divestment process and that they could not provide the bank guarantees required to secure KAEDC’s market obligation.
The NERC in its order, therefore stated that the failure of the company to get a new owner to enable it to meet its financial obligations had led to “all directors of KAEDC are hereby removed from office and the board of directors stands dissolved in the exercise of powers vested in the commission by section 75 of the Electricity Act.”
The commission then appointed Umar Hashidu as the administrator of Kaduna Disco in furtherance to section 75 of the Electricity Act.
“The administrator shall be the de facto Chief Executive Officer of KAEDC and shall be responsible for the management of the day-to-day affairs of the utility pending the finalisation of the sale of the undertaking to a new core investor.
“The administrator shall work with a team of special directors that shall constitute non-executive directors of the board for governance purposes. The following are hereby appointed as special directors for KAEDC; Alex A. Okoh, Chairman; Kabir Adamu, Sharfuddeen Mahmoud, John Ayodele, and Rahila Thomas,” the regulator stated in its order.
It noted that the executive management team that shall work with the administrator would be constituted by the commission and announced in due course.
The commission further stated that it shall administer the sale of the undertaking by the provisions of the Electricity Act based on the highest and best price offered for the undertaking.
This came as Kaduna Disco announced the resumption of duty of its new CEO, Hashidu.
“Umar Hashidu has taken over the reins as the Chief Executive Officer of Kaduna Electric. He took over from Yusuf Yahaya who exited last week,” the Head, Corporate Communication, Kaduna Disco, Abdulazeez Abdullahi, said in the statement.
Hashidu took over during a brief handover ceremony presided over by Dafe Akpaneye, the NERC Commissioner for Legal Licensing and Compliance, who conducted the ceremony at the company’s corporate headquarters in Kaduna.
Akpaneye thanked the former boss of the firm for the work he put in for 18 months, and charged Hashidu to harness the talent and resources available to him to take Kaduna Electric to greater heights.