UBA Plc has filed a winding up
petition against Sahara Energy Resource Limited (Sahara Energy) at a federal
high court in Lagos.
The petition was based on a N15
billion loan owed by KEPCO Energy Resources Limited (KEPCO).
Sahara Energy had stood as a guarantor
to KEPCO.
A winding up petition is a legal
action taken by a creditor or creditors against an insolvent company that owes
them money.
It can also be filed against a
company or companies who have served as guarantors of the defaulter, and if
approved by the court, will lead to a closure of or compulsory liquidation of
all the debtors assets to repay the loan.
The petition was filed before
Mohammed Liman, a judge of the high court, by Temilolu Adamolekun, UBA’s legal
counsel.
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.
How the ‘N15 billion debt’ came
about
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 had therefore granted KEPCO a
loan to the tune of $35 million in August 2013.
The petitioner 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 or
NN15,221,674,976.40 as of December 31, 2018.
The petitioner said Sahara Energy
had been notified several times to fulfill its obligation as a guarantor but had not done so, hence the
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.
SAHARA ENERGY RESPONDS
But 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 added that it did not
grant a direct guarantee to UBA on any loan transaction that UBA
could unilaterally enforce or sue
on.
“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 Group said in a statement.
“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.
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