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Keystone Bank has taken over Bacita Sugar Company, formerly known as Josepdam Sugar Company, due to the company’s failure to settle a staggering N25.3 billion debt. The bank’s action follows an order from the Federal High Court in Ilorin, which mandated Keystone Bank to recover its debt from KIA Africa Group, the parent company of Bacita Sugar Company.
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The court order, which was obtained by Keystone Bank, authorised the bank to take over the management of all assets belonging to Bacita Sugar Company, including the sugar factory located in Bacita, Kwara State. The order also froze 21 bank accounts linked to KIA Africa Group, including accounts held at major banks such as First Bank, Access Bank, and Zenith Bank.
As part of the takeover, Keystone Bank has appointed Mr. Yunus Abdulsalam (SAN) as the Receiver/Manager of Bacita Sugar Company, effective immediately. The appointment of a receiver/manager is a common practice in debt recovery cases, where the creditor appoints a third-party manager to take control of the debtor’s assets and manage them in a way that maximises the recovery of the debt.
According to the court order, the receiver/manager is authorised to take possession, control, and management of all assets belonging to Bacita Sugar Company, including the sugar factory, land, equipment, and other properties. The order also grants the receiver/manager the power to manage or dispose of the assets in a way that is deemed necessary to recover the debt.
When contacted at the scene of the enforcement, a representative of Keystone Bank stated, “Keystone Bank has effectively taken over the Josepdam Sugar Company (formerly Bacita Sugar Company) in Bacita, Kwara State, following KIA Africa Group of Africa’s failure to settle a staggering N25,358,203,258.09 debt owed to the financial institution.”
The representative added, “The takeover became imperative with a view to managing or outright disposing the factory with a view to using the proceeds or part thereof to defray the huge debt. The Federal High Court in Ilorin has ordered the Nigeria Police Force to give effect to the bank’s takeover with legal ramifications.”
KIA Africa Group had acquired Bacita Sugar Company from the Asset Management Corporation of Nigeria (AMCON) and secured loan facilities from Keystone Bank to finance the purchase. However, the company failed to meet its repayment obligations, leading to the debt ballooning to over N25 billion.
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According to reports, KIA Africa Group had sought a bank guarantee from Keystone Bank amounting to ₦8,323,649,250.00, representing 75% of the balance purchase consideration payable to AMCON. The bank granted this facility on the condition that KIA Africa Group would deposit the company’s title documents with Keystone Bank upon receiving them from AMCON, alongside a personal guarantee from its Managing Director, Kenneth Irhiogbe.
However, KIA Africa Group failed to fulfil this obligation, further compounding its financial liabilities. After exhausting all entreaties for the loan repayment and with the total debt ballooning to ₦25.3 billion, Keystone Bank exercised its rights under the Debenture Deed by appointing Abdulsalam to take control of all assets belonging to KIA Africa Group, including Bacita Sugar Company
The new management of Keystone Bank, led by its CEO, Mr. Hassan Imam, has aggressively embarked on a strategic debt recovery drive against recalcitrant creditors. The takeover of Bacita Sugar Company is seen as a significant step in this direction, as the bank seeks to recover its funds and maintain the integrity of its loan portfolio.
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In a statement, KIA Africa Group had previously announced its purchase of Bacita Sugar Company and pledged to revive the company’s operations. The company stated, “With the 30,000 hectares of land, inclusive of 5,600 hectares of developed farmland for sugarcane production, an installed milling capacity of 40,000 tonnes for refined sugar, an ethanol production plant, a new mill and power equipment that are on ground awaiting installation, a pool of skilled and experienced labour waiting to be hired back into action, and support government policy for sugar sufficiency and backward integration, the Bacita Sugar Company is poised to roar back to life as a major player in the industry. The KIA Africa Group will make this happen.”
However, with the takeover by Keystone Bank, the future of Bacita Sugar Company remains uncertain. The bank’s actions are seen as a necessary step to recover its funds, but they may also have significant implications for the company’s employees, customers, and the wider community.
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