Receivership row: Egbin Power challenges FBNQuest’s takeover move

Confusion deepened in Nigeria’s power sector on Wednesday following reports that KEPCO Energy Resources Nigeria Ltd, the majority owner of Egbin Power Plc, had been placed under receivership. This followed alleged moves by creditor FBNQuest Trustees Ltd to recover unpaid debts.

A public notice issued that day revealed that Senior Advocate of Nigeria, Kunle Ogunba of Insolvency Forte, was appointed as the Receiver/Manager by a court to take control of KEPCO’s assets. These include its 70 per cent stake in Egbin Power, Nigeria’s largest thermal power plant.

However, the companies involved—Egbin Power Plc, Ikeja Electric Plc, and First Independent Power Limited—categorically denied Ogunba’s receivership claims. They insisted they remain fully operational, financially stable, and under the control of their respective managements.

KEPCO, a subsidiary of the Sahara Energy Resources Group, acquired the majority stake in Egbin Power during the 2013 privatisation of Nigeria’s power sector, partly funded through credit facilities.

Ogunba stated that the receivership followed a Security Deed signed in August 2013 and registered with the Corporate Affairs Commission (CAC) in 2014. He noted that the Deed of Appointment was officially filed with the CAC in June 2025. Consequently, all financial institutions, debtors, and regulatory agencies were directed to suspend dealings with KEPCO’s assets until further notice.

The notice named institutions such as the Nigerian Bulk Electricity Trading Plc, Nigeria Electricity Supply Industry Stabilisation Security Limited, Nigerian Electricity Regulatory Commission (NERC), and the Bureau of Public Enterprises (BPE), asking them to take note of the situation.

“Take notice that Kunle Ogunba Esq., SAN, Legal Practitioner of INSOLVENCY FORTE… has been appointed Receiver/Manager by FBNQUEST Trustees Ltd over the entire undertakings… of KEPCO Energy Resources Nigeria Ltd – in Receivership and its 70 per cent stake in Egbin Power Plc,” the notice stated.

It continued:

“All debtors of the company are to preserve the assets… Also, all creditors (if any) are to send their proof of claims to the Receiver/Manager within 14 days.”

Further directives demanded banks and institutions to freeze all accounts, deposits, shares, and other assets related to KEPCO, citing an ongoing legal case — Suit FHC/L/CS/1281/2025 and Suit FHC/L/CS/1242/2025 — at the Federal High Court, Lagos, which had affirmed the appointment and refused to set it aside.

Power Companies Respond: “We Are Not in Receivership”

In a swift rebuttal, the power companies labeled the notice a false media report based on misleading advertorials, stressing that the claims contradict a subsisting court ruling.

“Egbin Power Plc, First Independent Power Limited, and Ikeja Electric Plc are absolutely not in receivership… or under any Receiver/Manager,” said Babatunde Osadare, Chief Legal and Regulatory Officer, Ikeja Electric, on behalf of the management.

Osadare emphasized that the claims are “false,” and represent a “malicious attempt at self-help designed to subvert the course of justice.”

He referenced court rulings delivered on August 5, 2025, in Suit Nos. FHC/L/CS/1242, FHC/L/CS/1244, FHC/L/CS/1245, where Justice Akintayo Aluko of the Federal High Court, Lagos, restrained the Lenders and their purported Receiver/Manager from:

• Accelerating the disputed loan before maturity

• Interfering with the assets or operational accounts

• Enforcing share security or finance documents related to the disputed debt

“We urge the public, our customers, financial partners, and regulators to disregard the falsehoods… These matters are actively being litigated,” Osadare added.

He reaffirmed the companies’ dedication to powering homes, businesses, and communities, asserting that operations remain stable and unaffected.

Sector-wide Implications and Expert Reactions

This legal battle adds to the existing financial turmoil in Nigeria’s power sector, already grappling with trillion-naira debts. Some distribution companies have previously been taken over by creditors due to non-performing loans.

The potential receivership of Egbin—Nigeria’s largest power plant—has sparked concerns of widespread sectoral disruption.

Commenting on the issue, Muda Yusuf, Director/CEO of the Centre for the Promotion of Private Enterprise, said the development highlighted the structural flaws and liquidity issues plaguing the power sector.

“The sector has become a troubling conundrum,” Yusuf said.

He attributed the challenges to:

• A flawed privatisation process

• Ageing infrastructure

• Limited technical and financial capacity

• Problematic pricing and tariff systems

• An unsustainable subsidy regime

“There’s a clear conflict between the objectives of investors, the government, and citizens… The citizens want affordable electricity, industrialists want investment-friendly tariffs, and the government wants political acceptability.”

Yusuf warned that the high interest rates in Nigeria’s economy make it almost impossible for long-term infrastructure investments to survive, especially given the highly leveraged nature of many DisCos.

He also expressed worry that Ikeja Electric, one of the most efficient DisCos, could be dragged into this controversy, saying this may foreshadow a similar fate for others.

“Five DisCos—Abuja, Benin, Kaduna, Kano, and Ibadan—are already in receivership. The government must urgently intervene to prevent a systemic collapse of the sector,” he added.

Yusuf concluded that banks in a receivership focus solely on debt recovery, often ignoring broader economic and social consequences. He warned that liquidation could be the outcome—putting millions of Nigerians, industries, and investors at serious risk.