UBA Plc has approached a Federal High Court in Lagos seeking to take over Sahara Energy Resource Limited (Sahara Energy) over a N15 billion debt.
According UBA in the suit, 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.
But Sahara Group has denied owing UBA, arguing that it has outstanding facilities and therefore it owes the lender no dime.
The company 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.
However, the bank stated that 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 stated that 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 stated 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 stated that Sahara Energy had been notified several times to fulfill 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 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 stated: “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.”