N25.3bn debt: Keystone Bank takes over Bacita Sugar Company, appoints Receiver
Keystone Bank has taken control of Bacita Sugar Company, also known as Josepdam Sugar Company, due to the company’s failure to settle a debt of N25,358,203,258.09.
The bank has appointed Mr Yunus Abdulsalam (SAN) as the Receiver/Manager of the company with immediate effect.
This move follows an order issued by the Federal High Court in Ilorin, which authorised Keystone Bank to recover the debt from KIA Africa Group, the entity that acquired Josepdam Sugar Company. The court also ordered the freezing of 21 accounts linked to KIA Africa Group.
Ruling on an ex-parte motion, the Presiding Judge, Justice A. O. Awogboro, instructed Keystone Bank to take over the management of all assets associated with the company. The judge further stated:
“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 fixed and floating charges for the loan facility granted by the 1st Applicant.”
The court also prohibited the Respondent, its officers, servants, agents, and any other individuals acting on its behalf from interfering with or obstructing the Receiver/Manager in their role. Additionally, the Inspector-General of Police, Assistant Inspectors-General of Police, and all Commissioners of Police across Nigeria were ordered to assist the Receiver/Manager in enforcing the court’s orders.
The court’s ruling included further instructions to several banks—including First Bank of Nigeria, Access Bank, Citibank, Ecobank, and others—to freeze all accounts belonging to KIA Africa Group and its principal, Kenneth Irihiogbe. The banks were also required to confirm their compliance with the order by filing a verifying affidavit.
A representative of Keystone Bank confirmed the takeover at the scene, stating: “Keystone Bank has effectively taken over Josepdam Sugar Company in Bacita, Kwara State, following KIA Africa Group’s failure to settle a significant debt of N25,358,203,258.09 owed to the bank.”
The representative further explained that the takeover was necessary to either manage or sell the factory, with the proceeds to be used to address the outstanding debt. The Federal High Court in Ilorin has directed the Nigeria Police Force to ensure the enforcement of the bank’s takeover.
KIA Africa had acquired Josepdam Sugar Company from the Asset Management Corporation of Nigeria (AMCON) and sought financial backing from Keystone Bank for the purchase. The bank provided a series of loan facilities for KIA Africa to acquire the sugar factory, based on a revised 24-month repayment plan.
As part of the acquisition agreement, KIA Africa was required to provide a bank guarantee of ¦ 8,323,649,250.00, representing 75% of the remaining purchase consideration to AMCON. However, KIA Africa failed to meet this obligation and did not deposit the company’s title documents with Keystone Bank, further exacerbating the debt.
After repeated attempts to secure repayment of the loan, and with the total debt reaching N25.3 billion, Keystone Bank exercised its rights under the Debenture Deed and appointed Abdulsalam as the Receiver/Manager to take control of all assets belonging to KIA Africa Group, including the sugar company.
Under the leadership of its new CEO, Mr Hassan Imam, Keystone Bank has aggressively pursued a strategic debt recovery campaign against defaulters.
In 2021, KIA Africa announced its acquisition of Bacita Sugar Company, outlining ambitious plans for the revitalisation of the factory. The company boasted a vast 30,000 hectares of land, including 5,600 hectares of developed farmland for sugarcane production, and installed milling capacity of 40,000 tons for refined sugar.
They also planned to install a new ethanol production plant, milling equipment, and power facilities. KIA Africa pledged to revitalise the sugar company, positioning it as a significant player in the industry, aided by government policies supporting sugar sufficiency and backward integration. However, these plans have now been hindered by the company’s financial difficulties.
