Keystone Bank has taken full control of Bacita Sugar Company, also known as Josepdam Sugar Company, after the firm failed to repay a debt of N25.3 billion. The financial institution has appointed Senior Advocate of Nigeria (SAN), Mr. Yunus Abdulsalam, as the Receiver/Manager to oversee the company’s assets and management.
The Federal High Court in Ilorin granted the takeover order after KIA Africa Group, which acquired Josepdam Sugar Company, failed to meet its financial obligations to Keystone Bank. In addition to the takeover, the court ordered the freezing of 21 bank accounts linked to KIA Africa Group.
Justice A. O. Awogboro, who presided over the case, ruled that Keystone Bank had the legal right to assume control of the company’s assets. The court mandated that the Receiver/Manager take full possession and prevent any interference from the previous owners or their representatives.
The judge’s ruling specifically directed:
- Keystone Bank’s appointed Receiver/Manager should take over all assets secured under the loan facility agreement.
- The Inspector-General of Police, Assistant Inspectors-General, and other law enforcement agencies must assist in enforcing the takeover.
- Commercial banks including First Bank, Access Bank, Zenith Bank, GTBank, and others should freeze the accounts of KIA Africa Group and its Managing Director, Kenneth Irhiogbe.
A representative from Keystone Bank, who was present at the enforcement scene, stated, “This takeover became necessary after repeated failed attempts to recover the debt. The bank will now manage or sell off the company to recover the loan.”
KIA Africa Group had purchased Josepdam Sugar Company from the Asset Management Corporation of Nigeria (AMCON) and secured several loans from Keystone Bank to facilitate the acquisition. A major part of this deal involved Keystone Bank providing an N8.3 billion bank guarantee, which was 75% of the remaining balance KIA Africa owed AMCON. In return, KIA Africa was supposed to submit the company’s title documents to Keystone Bank. However, the company defaulted on this agreement, leading to its financial troubles.
Despite multiple opportunities to settle the debt, KIA Africa failed to make payments, forcing Keystone Bank to activate its legal rights under the Debenture Deed. This allowed the bank to appoint a Receiver/Manager to take control of all assets belonging to KIA Africa Group, including the sugar company in Bacita, Kwara State.
Keystone Bank’s new leadership, headed by CEO Hassan Imam, has been aggressively recovering outstanding debts owed to the institution. Industry observers believe this move will serve as a warning to other loan defaulters.
Before its financial crisis, KIA Africa had ambitious plans for Bacita Sugar Company. The company had aimed to revamp sugarcane production across 30,000 hectares, increase refined sugar production, and develop an ethanol plant. However, the company’s financial mismanagement derailed these plans.
