Business
IBEDC: Ownership crisis worsens struggling power firm’s woes
...as 86G battles Archilight for takeover
A high-stake battle for the control of one of Nigeria’s 12 electricity distribution companies, Discos, the Ibadan Electricity Distribution Company (IEDC), is currently raging between the two leading firms that bided to acquire the company from the Assets Management Company of Nigeria (AMCON) in 2024, Business Hallmark can report.
The two parties in the feud, Archlight Nigeria Limited and 86 Gardens Limited, both emerged as the preferred bidder and reserved bidder of the disco respectively at the end of a competitive bidding process conducted in October 2024 by the Federal Ministry of Power, the Bureau of Public Enterprises (BPE), and the Nigerian Electricity Regulatory Commission (NERC), and overseen by AMCON.
In December 2024, the electricity distribution company valued at over N1 trillion was transfered to Archlight Limited, whose bid of N100 billion was declared winner.
While stakeholders in the power sector, though expressed reservations on the way and manner the exercise was handled by the various government agencies that conducted it, they nonetheless welcomed the completion of the exercise, saying it would finally put an end to the many troubles of the company.
However, barely four months after the troubled disco was successfully handed over to Archlight Nigeria Limited, a new crisis is threatening to tear it apart.
Contentious issues
The latest crisis came to light recently when the reserved bidder, 86 Gardens Limited, publicly declared itself as a part owner of the disco after successfully acquiring 60 percent stake in the company.
Promoters of 86 Gardens Limited had approached a Federal High Court sitting in Lagos to stop Archlight from transferring the shares of the firm to any other party except 86 Gardens Limited until the case it filled in court is decided.
According to 86 Gardens Limited, by right, it owns 50 percent of the 60 percent shares bought by Archlight from AMCON as represented in the Custody Agreement, Share Sales Agreement and the Share Transfer Forms it had earlier signed with Archlight.
Ruling on March 31, 2025 on the prayers asked for by 68 Gardens, the presiding judge, Justice Musa Kakaki, restrained Archlight or its agents from transferring to another party or a third party the 50 per cent equity shareholding already signed over to 86 Gardens.
He then fixed May 16, 2025 for hearing on the substantive suit filled by 86 Gardens Limited against Archlight Nigeria Limited and two other defendants.
However, Archlight has kicked against 86G’s attempt to “surreptitiously take over IEDC through the back door”.
According to Archlight in a statement signed by its legal consultant, Jesuyemisi Odeyemi, the firm has full and unencumbered ownership of its equity in IBEDC secured through a transparent, competitive, and duly recognized bid process.
“Contrary to the sensational narrative being pushed by 86 Gardens, the facts remain clear, verifiable, and grounded in documented corporate processes and legal principles.
“Archlight Nigeria Limited emerged as the preferred bidder for the 60 per cent equity in IBEDC offered by the Asset Management Corporation of Nigeria (AMCON) during a competitive bid in 2024”, Odeyemi stated.
Shedding more light on the genesis of the crisis, Odeyemi alleged that the reserved bidder, 86 Gardens Limited, had congratulated Archlight following its announcement as the preferred bidder, after which it made unsolicited approach to become a co-investor in Archlight and not in IBEDC.
While admitting that some Archlight shareholders actually negotiated a deal with 86 Gardens Limited to transfer some of their share to it, the legal counsel noted that the agreement-in-principle was, however, kept in escrow pending the fulfillment of terms and conditions, especially the payment of agreed fees for share transfer by 86G Limited.
She alleged that 86 Gardens failed to fulfil the agreement it signed with some Archlight shareholders for the transfer of their equity in Archlight to it despite several deadline extensions.
“Despite multiple deadline extensions, 86 Gardens never made the required financial commitment. Consequently, the co-investment proposal lapsed, and Archlight’s shareholders that negotiated with 86G lawfully disposed of their shares to other interested parties in August 2024 and exited the company.
“86G later insisted the Custodian of the unfulfilled agreement-in-principle must list it as a shareholder of Archlight despite not making any financial commitment.
“This prompted the Custodian to convene a meeting of all the parties to explore the possibility of settling the matter.
”Archlight noted at the meeting that though 86G had no legal claim due to its failure to make the agreed financial payment, it would still entertain a co-investment deal acceptable to all the shareholders.
“86G accepted the agreement deal reached at the meeting and promised to formally revert within one week.
“Instead of reverting on the agreement as promised, Archlight was shocked to learn that 86G had filed a suit at the Federal High Court Abuja challenging the legality of the announcement of Archlight as the preferred bidder instead of its SPV, Africa Plus Partners Nigeria Limited. This suit was contested by Archlight and subsequently dismissed on October 21, 2024.
“This effectively foreclosed any business relationship between 86G and Archlight on its share acquisition”, Odeyemi explained.
Shady deals
However, BH reliably gathered that, contrary to the position of Archlight’s legal counsel that 86G only came into the picture after the completion of the bidding process in December 2024, the share purchase deal between the promoters of Archlight and 86G actually predates the commencement of the bidding process for IBEDC.
According to informed sources in the power industry privy to the deal, the Archlight and 86G bids for IBEDC are actually one.
“The promoters of the two firm actually teamed up to work on how to meet the various requirements needed to win the bid, especially the raising of the funds for the acquisition of the disco before presenting double bids for the firm with their different Special Purpose Vehicles (SPVs).
“With the conclusion of the bidding exercise, the winner, Archlight, was expected to transfer 50 percent of the 60 percent equity to Africa Plus Partners Nigeria Limited, the SPV used by 86G for the bid as agreed.
“However, it seems the promoters of Archlight have other plans. It is now obvious that they never intended to cede 50 percent of Archlight to 86G as as agreed, but merely used the firm to boost its bid.
“Already, the case has gone before the courts. Let us wait to see how it plays out”, the source, who begged for anonymity, disclosed.
Also speaking on the matter, a source in 86G, who also did not want his identity disclosed because of the fear of being slammed with a contempt charge as the case is already before the courts, claimed that Archlight’s legal counsel is trying to be clever by half by her statement that 86G only came into the picture after the announcement of her client as the preferred bidder in December 2024.
“You can clearly see from the statement she released to the media last week that she actually contradicted herself.
“For instance, she inadvertently admitted that Archlight shareholders that negotiated with us (86G) lawfully disposed their shares to other interested parties in August 2024 and have exited the company.
“That is confirmation that our agreement was before Archlight shareholders illegally transfered their shares to third parties in August 2024.
“Also, she punctured her own claims when she stated that Archlight actually contested the suit we instituted in court, which she claimed was dismissed on October 21, 2024.
“Yet, she gleefully declared in her press statement that 86 Gardens Limited made an unsolicited approach to become a co-investor in Archlight in December 2924 after the firm she represents was confirmed as the preferred winner.
“Also, her claim that 86G only attempted to own 50 percent stake in Archlight and not IBEDC is preposterous. Even a 100-level law student will know that whoever owns Archlight owns Ibadan Electricity Distribution Company. Archlight was only used as an SPV to acquire the disco.
“She should also be asked what was put in an escrow account. The deals agreement as she claimed or the fund we actually paid for the shares”, the 86G insider demanded.
Genesis of Crisis
It would be recalled that IBEDC, responsible for supplying electricity to Oyo, Osun, Ogun, Kwara and parts of Ekiti, Niger and Kogi States has always been in the news for the wrong reasons.
For instance, the disco battled a debilitating financial crisis soon after it was acquired by its former owners, a situation that prevented it from living up to the expectations of its numerous customers.
The firm’s board was sacked on many occasions by regulatory bodies for violating corporate rules.
In 2022, the company was finally taken over from Integrated Energy Distribution and Marketing (IEDM) Limited, a consortium led by Tunde Ayeni, a former chairman of Polaris Bank by AMCON after IEDM’s promoters defaulted on a massive loan it got from Polaris Bank to acquire the firm in a privatisation exercise held by the administration of former President Goodluck Jonathan in 2013.