Keystone Bank has taken full control of Bacita Sugar Company,operated by Josepdam Sugar Company, after KIA Africa Group failed to settle its outstanding debt of N25,35bn.
The takeover, executed on Tuesday, was backed by a ruling from the Federal High Court in Ilorin, Kwara State, granting the bank authority to recover its funds.
The court appointed Yunus Abdulsalam, SAN, as the Receiver/Manager of the company, granting him immediate authority over all its assets.
In addition to ordering the takeover, the court froze 21 bank accounts belonging to KIA Africa Group and its Managing Director, Kenneth Irihiogbe, across multiple financial institutions. This action was taken to prevent any interference or diversion of funds that could hinder the bank’s recovery process.
Justice A. O. Awogboro, in the ruling, emphasized that Keystone Bank had the legal right to assume possession and management of all the company’s assets as outlined in the Debenture Deed.
The order extended beyond just the physical property, restricting KIA Africa Group and its representatives from obstructing the takeover in any form. Security agencies, including the Inspector General of Police, were directed to enforce the ruling and provide support to the Receiver/Manager.
KIA Africa Group had initially acquired Josepdam Sugar Company from the Assets Management Corporation of Nigeria, AMCON, securing a series of loan facilities from Keystone Bank to facilitate the purchase.
The agreement was structured with a 24-month repayment plan, and as part of the conditions, KIA Africa was required to deposit the company’s title documents with the bank upon full acquisition. However, it failed to meet this obligation, complicating its financial liabilities.
In a further attempt to solidify its ownership of the sugar company, KIA Africa sought an N8.3 billion Bank Guarantee from Keystone Bank. This amount represented 75 percent of the balance payable to AMCON.
The bank approved the facility under the condition that the company’s title documents would be used as collateral, along with a personal guarantee from its Managing Director. However, KIA Africa did not follow through on these commitments, leading to increased financial strain and a breach of the agreement.
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Despite multiple attempts by Keystone Bank to recover the loan, the company failed to meet its repayment obligations. Over time, the debt surged to N25.3 billion, leaving the bank with no choice but to activate its legal rights under the Debenture Deed.
This led to the appointment of a Receiver/Manager to take full control of the company’s assets and operations.
The new leadership at Keystone Bank, under CEO Hassan Imam, has intensified its debt recovery efforts, targeting high-profile loan defaulters.
The bank’s management has made it clear that reclaiming outstanding debts is a top priority, with a firm stance against defaulting borrowers.
The takeover of Bacita Sugar Company is part of this broader strategy to recover non-performing loans and stabilize the bank’s financial position.
Before running into financial difficulties, KIA Africa Group had expressed ambitious plans for Bacita Sugar Company. The firm had pledged to transform it into a major player in Nigeria’s sugar industry, leveraging its 30,000-hectare land, 5,600 hectares of sugarcane farmland, ethanol production plant, and a milling capacity of 40,000 tons of refined sugar.
It also had plans to install new power equipment and create employment opportunities within the region. However, the company’s inability to meet its financial obligations disrupted these projections, leading to its current predicament.
With Keystone Bank now in control, the future of Bacita Sugar Company remains uncertain. The financial institution has indicated that it will either manage the factory or sell it outright, using the proceeds to recover the debt.
This marks a significant turning point for the once-promising sugar company, whose ownership and operational structure may soon change entirely.
NAN
