The core investor in the Abuja Electricity Distribution Company (AEDC), CEC Africa Investments Limited (CECA), has faulted claims by its partner, Xerxes Global Investment Limited that its goodwill played a significant role in the acquision of the utility in 2013.
CECA in a statement by its CEO, Engr. Emmanuel Katepa said Xerxes failure to meet the $41 million funding agreement for acquiring AEDC was a major breach.
The Chairman of Xerxes Limited, Amb. Shehu Malami had claimed in an interview in some newspapers, that the investors’ crisis at AEDC is being fuelled by greed.
Malami in the interview also claimed that CECA ought to pay him for his goodwill and name which facilitated the sale of AEDC to KANN Utility Company Limited, their consortium.
But CECA in the statement said goodwill could not have bought the DisCo.
During the privatisation exercise, there were financial obligations the bidders were expected to meet which prompted CECA and Xerxes to agree on the financial arrangements, starting with the initial payment of $41m to the Bureau of Public Enterprises (BPE).
Katepa disclosed that Xerxes immediately failed to pay its contribution leaving all the payments to be done by CECA.
He explained: “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.”
Katepa challenged Malami and Xerxes to tell the public if it brought any fund in the acquisition of AEDC.
“Ambassador Shehu 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, as 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.