N15bn debt: UBA moves to take over Sahara Energy
UBA Plc has filed a petition against Sahara Energy Resource Limited (Sahara Energy) at a Federal High Court in Lagos asking for an order to take over and wind down the operation of the oil firm over a N15 billion debt.
UBA said Sahara Energy stood as a guarantor for KEPCO Energy Resources Limited (KEPCO) to access a loan of $35 million in August 2013, which it has not been able to pay back.
However, Sahara Group has denied being indebted to UBA, saying it neither has outstanding facilities with the bank nor did it borrow any money from UBA. The firm also denied granting a direct guarantee to UBA on any loan transaction that UBA could unilaterally enforce or sue on.
The petition was filed before Justice Mohammed Lima of the Federal High Court, by a legal counsel to UBA, Temilolu Adamolekun.
The bank said KEPCO had through a loan raised capital to fund the acquisition of Egbin Power Plant operated by Sahara Power Group, a privately-owned power company under the Sahara conglomerate.
In 2013, the Federal Government granted KEPCO, a Korean company 70% stake of Egbin power plant at a sale value of $407.3 million, which was equivalent to N64.35 billion at the existing exchange rate.
In order to fund that acquisition, the petitioner said KEPCO had applied for a credit facility from several banks, including UBA, with Sahara Energy standing in as a “corporate guarantor” to secure the loan.
FBN Capital Limited and First Nigeria Limited were appointed as the facility agent and security trustee respectively.
UBA said KEPCO failed to meet its obligations even after restructuring the loan on two different occasions.
The interest on the rescheduled debt is said to have increased the facility to $42,282,430.49 (N15,221,674,976.40) as of December 31, 2018.
The petitioner said Sahara Energy had been notified several times to fulfil its obligation as a guarantor but had not done so, hence the need to file a winding up order.
“The company herein is insolvent and unable to pay its debt. In the circumstances, it is just and equitable that the company should be wound up,” the petition read.
The petitioner also sought “an order that the company, Sahara Energy Resources Ltd, be wound up by the court under the provisions of Companies and Allied Matters Act.”
Following an ex-parte motion filed by Adamolekun, the bank’s lawyer, Liman ordered that the winding up petition be advertised in the Federal Government’s official gazzette and a national daily newspaper.
In a statement issued yesterday, Sahara Group said, “Our lawyers have been duly instructed and have taken all necessary steps to ensure that the order is discharged or set aside as soon as practicable.
“Sahara Energy Limited (SERL) and the entire Sahara Group will vigorously pursue and defend UBA’s petition to its logical conclusion with a view to dismissing the petition.
“SERL will provide periodic updates to its esteemed clients, suppliers and bankers as may be necessary, of steps being taken in connection with the suits and the results of effort to set aside the order and strike out the suit.”
The hearing of UBA’s petition has been adjourned till April 30.