Keystone Bank Takes Over Sugar Company Over N25 Billion Debt
- Due to nonpayment of a loan, Keystone Bank has taken over Bacita Sugar Company (previously Josepdam Sugar Company)
- Yunus Abdulsalam has been appointed the firm's manager and receiver with immediate effect following a court injunction
- In his ruling on an ex-parte motion, the presiding judge asked Keystone Bank to take over all corporate assets
Legit.ng journalist Zainab Iwayemi has 5 years of experience covering the Economy, Technology, and Capital Market.
Bacita Sugar Company (formerly Josepdam Sugar Company) has been taken over by Keystone Bank due to nonpayment of a debt of N25,358,203,258.09. With immediate effect, Yunus Abdulsalam (SAN) was named the firm's receiver and manager.
Source: UGC
The came after the Federal High Court in Ilorin issued an injunction requiring the bank to collect its debt from the Josepdam Sugar Company's buyer, KIA Africa Group of Africa.
Additionally, 21 KIA Group accounts have been frozen by the court. Justice A. O. Awogboro, the presiding judge, requested that Keystone Bank assume control of all firm assets in his decision on an ex-parte motion.
The ruling in favour of Keystone bank
The judge ruled:
“It is hereby declared that in the Notice and Deed of appointment dated 30th December, 2024, the 2nd Applicant is the duly appointed Receiver/Manager over the assets of the Respondent secured as a fixed and floating charges for the loan facility granted by the 1st Applicant.
“An order of this Honourable Court is hereby made directing the 2nd Applicant, in his role as the appointed Receiver/Manager under the duly executed Debenture Deed,
“He is to take possession, control and management of all assets of the Respondent secured as fixed and floating charges for the loan facility granted by the 15t Applicant.
When contacted at the scene of the enforcement, the bank representative said:
“Keystone Bank has effectively taken over the Josepdam Sugar Company (formerly Bacita Sugar Company) in Bacita, Kwara State, following KIA Africa Group of Africa’s failure to settle a staggering N25,358,203,258.09 debt owed to the financial institution.”
“The takeover became imperative with a view to managing or outright disposing the factory with a view to using the proceeds or part thereof to defray the huge debt.
“The Federal High Court in Ilorin has ordered the Nigeria Police Force to give effect to bank’s take over in a legal ramifications.”
What happened between Bacita and Keystone?
The Assets Management Corporation of Nigeria (AMCON) sold Josepdam Sugar Company to KIA Africa, which had previously applied for and received credit support from Keystone Bank.
The bank used a number of loan facilities offered by the KIA Africa Group specifically for the acquisition of the sugar factory on a 24-month repayment plan that was mutually revised.
KIA Africa requested a bank guarantee from Keystone Bank for N8,323,649,250.00, or 75% of the remaining acquisition consideration owed to AMCON, in an effort to obtain complete ownership of the company.
The bank provided this loan with the understanding that KIA Africa would provide a personal guarantee from its managing director, Kenneth Irhiogbe, and deposit the company's title documents with Keystone Bank as soon as they were received from AMCON.
But KIA Africa didn't fulfill this commitment, which made its financial problems worse. After all pleas for loan repayment had been exhausted and the total debt had risen to N25.3 billion, the bank used its rights under the Debenture Deed to designate Abdulsalam to assume control of all KIA Africa Group assets, including the sugar company.
The bank's new administration, headed by Mr. Hassan Imam, the CEO, has aggressively started a systematic debt recovery campaign against uncooperative debtors.
“KIA Africa Group in 2021 announced its purchase of the Sugar Company and pledged to hit ground running.
Source: Getty Images
The company said:
“With the 30,000 hectares of land, inclusive of 5,600 hectares of developed farmland for sugarcane production, installed milling capacity of 40,000 tons for refined sugar, an ethanol production plant, a new mill and power equipment that are on ground awaiting installation, a pool of skilled and experienced labour waiting to be hired back into action, and support government policy for sugar sufficiency and backward integration, the Bacita Sugar Company is poised to roar back to life as a major player in the industry. The Kia Africa Group will make this happen.”
Keystone Bank speaks on FG takeover
Legit.ng earlier reported that Keystone Bank Limited clarified reports of a judgment by the Lagos State Special Offences Court in Ikeja, on Tuesday, February 11, 2025, which handed over the bank to the Nigerian government.
The court order also concerns the status of the former shareholders of the bank, Sigma Golf Nigeria Limited and Umaru H. Modibo.
According to a statement by the bank’s management, the development comes after several actions by the Central Bank of Nigeria (CBN) to strengthen the banking sector.
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Source: Legit.ng
