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Banks looking to take over Sahara Group’s power assets may struggle to find value as Ikeja Electricity Distribution Company (Ikeja DisCo) reported a pretax loss of N25.2 billion in the Full Year (FY) period to December 2023.
Distribution and administrative costs came in at N55.7 billion up 25.7% in 2023, while net finance costs rose 70% to N10.34 billion in the period.
The power distribution firm however reported revenue of N207.34 billion in FY 2023, its latest available financials show. Its revenue was up 21.6% compared to N170.4 billion in FY 2022.
Ikeja DisCo received an income tax credit of N21 billion which helped to reduce after tax loss to N4.1 billion for 2023.
The firm had -N177 billion in accumulated deficit on its books as at the end of 2023, up from –N172.88 billion as at December 2022.
Ikeja Disco said it had a tariff shortfall of N83.64 billion as at December 2023 which it used to settle invoices, trade payables stood at N115 billion, while it spent N4.19 billion on direct acquisition of property plant and equipment.
The Company’s current liabilities exceeded its current assets by N50.29 billion as at December 2023.
Employee benefit expense came in at N12.47 billion plus staff welfare of N121.89 million and contract labor costs of N1.64 billion, amounting to a total of N14.52 billion. Repairs and maintenance came in at N2.4 billion.
Analysis of the 2023 financial statement of Ikeja Distribution Company or Ikeja Disco shows it has a cash and bank balance of N23.01 billion, which is not enough to cover total current liabilities of N183.46 billion.
In short, doing the simple math shows the cash ratio stood at 0.125 as at December 2023 from 0.089, according to MoneyCentral calculations.
A company’s cash ratio measures how easily it can cover its short-term liabilities using only its most liquid assets: cash and cash equivalents. A company’s cash ratio is considered by lenders when they decide whether to extend loans to the company. Investors also watch the figure for assurance that the company is stable.
A calculation that’s greater than one means that a company’s cash on hand exceeds its current debts. A calculation of less than one means that a company has more short-term debt than cash.
Ikeja Disco purchased N215.31 billion worth of energy from the Nigerian Bulk Electricity Trading (NBET) Plc, the firm which manages and administers electricity pool (‘The Pool’) in the Nigerian electricity supply industry (NESI).Total energy purchased from the Grid makes up the large chunk of total cost of sales that are rising.
The power company posted a loss after tax of N4.10 billion as at December 2023, from a profit position of N33.96 billion as at December 2022. Accumulated losses of N177.05 billion indicates it has been recording more losses than profit through its existence. Total loans and borrowings stood at N39.2 billion while total financial liabilities made up of trade and other payables (excluding statutory deductions) plus loans and borrowings stood at N173.94 billion.
Banks don’t like unprofitable ventures since loan recovery becomes a herculean task which has a negative impact on asset quality.
Nigerian Banks are in court seeking to take over the assets of Sahara Group, including New Electricity Distribution Company Limited, Kepco Energy Resources Limited and NG Power HPS Limited, which are subsidiaries of the embattled energy firm over a default on an outstanding loan balance said to be N1.1 trillion.
MoneyCentral understands that the Sahara Group owned entities took facilities from major Nigerian Banks including: Access Bank, First Bank, Zenith Bank, Union Bank, UBA, Fidelity Bank, FCMB, Keystone Bank and Sterling Bank among others.
“A default has occurred under the facilities. The Lenders posit that the total liability is N1.1 trillion while Sahara counters that it is N340 billion,” a source familiar with the matter told MoneyCentral.
MoneyCentral understands that the CEOS of all the Banks took the decision to proceed against the defaulting borrowers.
They instructed First Trustees Limited through the Facility Agent, FBNQuest Merchant Bank Limited to enforce the Security and to appoint Kunle Ogunba SAN as receiver.
On or about July 19, 2025 the appointment was done.
However, while the processes were being filed in court, the Sahara Group got wind and filed a suit against the lenders to injunct them against enforcing their security.
Egbin Power Plc, Ikeja Electric Plc (IE) and First Independent Power Limited (FIPL), in a press release by Babatunde Osadare, Chief Legal and Regulatory Officer, Ikeja Electric, said that in a definitive ruling delivered on August 5, 2025 (Suit Nos. FHC/L/CS/1242, FHC/L/CS/1244, FHC/L/CS/1245), the Honorable Justice Akintayo Aluko of the Federal High Court in Lagos explicitly restrained the Lenders and their purported Receiver/Manager from taking any adverse actions.
Osadare said the rulings specifically prohibits the purported Receiver/Manager from: accelerating the disputed loan facility before its maturity; interfering in any manner with the assets, businesses, or undertakings of the Power Entities, including operational accounts; enforcing any share security over the assets of the Power Entities or their sponsors, based on the disputed debt; or unilaterally enforcing any finance documents related to the disputed debt.
Kepco Energy Resources Limited owns a 70 percent stake in Egbin Power Plc, NG Power HPS Limited is a subsidiary/ special purpose vehicle of Sahara Energy that owns 70 percent of First Independent Power Limited and New Electricity Distribution Company Limited owns a 70 percent stake in Ikeja Electric Distribution Plc (Ikeja Disco).
Ikeja Electric Plc bought the power assets of PHCN within the franchise area comprising (6) business units namely keja, Oshodi, Shomou, Ikorodu, Akowonjo and Abule-Egba.
The sale was authorized by the Bureau of Public Enterprises (BPE) to the consortium of New Electricity Distribution Company Limited (NEDC), with Korean Electric Power Corporation (KEPCO) as its technical partner, as part of the privatisation of the electric power sector and effective 1 November 2013, the assets were handed over by the Federal Government of Nigeria.
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