N25.3bn Debt: Keystone Bank Takes Over Bacita Sugar Company

Keystone Bank has overtaken Bacita Sugar Company (Josepdam Sugar Company) over its failure to settle a N25,358,203,258.09 debt.

The bank immediately appointed Mr Yunus Abdulsalam (SAN) as the firm’s Receiver/Manager.
This development followed an order of the Federal High Court, Ilorin, which mandated the bank to recover its debt from KIA Africa Group of Africa, which has acquired.
Josepdam Sugar Company.

The court has also frozen 21 accounts belonging to the KIA group.

The Presiding Judge, Justice A. O. Awogboro, ruling on an ex-parte motion, asked Keystone Bank to manage all the firm’s assets.

The judge said: “It is hereby declared that in the Notice and Deed of appointment dated 30” 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.

“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.

“An order of this Honourable Court is hereby granted restraining the Respondent herein whether acting by themselves or through their officers, servants, agents, privies, legal representatives or such other persons claiming through or acting on their behalf whosoever and howsoever described from challenging, interfering with or otherwise obstructing or frustrating the 2nd Applicant as the Receiver/Manager appointed by the 1st Applicant over all the assets of the respondents lying in any part of Nigeria, including the Respondent’s assets lying and situate at Josepdam Sugar Factory, Bacita Layout, Kwara State.

When contacted at the scene of the enforcement, the bank representative said: “Keystone Bank has effectively taken over the Josepdam Sugar Company in Bacita, Kwara State, known as Bacita Sugar Company, following KIA Africa Group of Africa’s failure to settle a staggering ₦25,358,203,258.09 debt owed to the financial institution.

“The takeover became imperative to managing or outrightly disposing the Sugar Factory to use the proceeds or part thereof to defray the enormous 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.”

KIA Africa had successfully acquired Josepdam Sugar Company from the Assets Management Corporation of Nigeria (AMCON) and had earlier sought and obtained Credit backing from Keystone Bank.

The bank used a KIA Africa Group series of loan facilities to acquire the sugar factory, with a mutually revised 24-month repayment plan.

To secure full ownership of Josepdam Sugar Company, KIA Africa sought a Bank Guarantee from Keystone Bank amounting to ₦8,323,649,250.00—75% of the balance purchase consideration payable to AMCON.

The bank granted this facility on the condition that KIA Africa would deposit the company’s title documents with Keystone Bank upon receiving them from AMCON, alongside a personal guarantee from its Managing Director, Barrister Kenneth Irhiogbe.

However, KIA Africa failed to fulfil this obligation, compounding its financial liabilities.

After exhausting all entreaties for the loan repayment and with the total debt ballooning to ₦25.3 billion, Keystone Bank exercised its rights under the Debenture Deed by appointing a Receiver/Manager, Mr Yunus Abdulsalam, SAN, to take control of all assets belonging to KIA Africa Group including Josepdam Sugar Company.

The bank’s new management, led by its CEO, Mr Hassan Imam, has aggressively embarked on a strategic debt recovery drive against recalcitrant obligors.

“KIA Africa Group 2021 announced its purchase of the Sugar Company and pledged to hit the ground running.

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. “