UBA is planning to sell the Abuja Electricity Distribution Company (AEDC) to recover a debt of N56bn The bank took over AEDC in December 2021 after its major stakeholder, Kann Consortium, defaulted on a loan The plan sale has led to an increase in UBA’s share price, as investors see it as a positive strategic move
The United Bank for Africa (UBA) has announced its intention to sell the Abuja Electricity Distribution Company (AEDC) in order to recover a debt of $122 million(N56.16bn) owed by the company. UBA took over AEDC in December 2021 after its major stakeholder, Kann Consortium, was unable to repay the loan it had taken to acquire a 60% stake in the Disco in 2013.
The plan to sell was revealed at the bank’s audited 2022 results conference call.
According to Bloomberg, Ugochukwu Nwaghodoh, Executive Director of Risk Management and Finance, stated that discussions about the sale were at an advanced stage and he expects the process to be completed this year.
Reactions about the UBA takeover of AEDC Punch reports that the Minister of Power, Abubakar Aliyu, explained that the UBA takeover of the Disco was necessary due to operational challenges arising from a dispute between KANN Consortium and UBA, which resulted in a lack of access to intervention finances and led to service disruptions.
The Nigerian Electricity Regulatory Commission and the Bureau of Public Enterprises also endorsed the changes in shareholding and the appointment of interim management for the AEDC. The AEDC serves customers in Kogi, Nasarawa, Niger States, and the Federal Capital Territory.
UBA share price soar
Following the news of the potential sale and recovery of the UBA huge loan in AEDC, the share price trading on the Nigerian exchange jumped to a one-month high Thursday, 6 April 2023.
Checks show that UBA’s share price closed at N8.50, on Thursday the highest level since March 7. BusinessDay reports that 64.20 million units of UBA’s shares were traded, the most activity since July 19, 2022.
Elumelu speaks on his journey to the top, advises youths Meanwhile, in an earlier report, Legit.ng provided insight into Tony Elumelu provided insight into his journey to becoming a bank owner Elumelu revealed how he applied for the job despite not having the necessary requirements Today, Elumelu is the Chair of the Board of the United Bank for Africa with branches in 20 African countries.