By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Tribune OnlineTribune OnlineTribune Online
  • Home
  • News
  • Columns
  • Editorial
  • VIDEOS
  • Entertainment
  • Politics
  • Health
  • Opinions
  • SPORTING TRIBUNE
Reading: Mounting deficits raise concerns over bank takeover as Ikeja Electric reports N25bn pretax loss
Share
Notification Show More
Font ResizerAa
Tribune OnlineTribune Online
Font ResizerAa
  • Home
  • News
  • Columns
  • Editorial
  • VIDEOS
  • Entertainment
  • Politics
  • Health
  • Opinions
  • SPORTING TRIBUNE
  • About Us
  • Contact us
  • Disclaimer
  • Privacy
  • Advertise
Have an existing account? Sign In
Follow US
© 2025 African Newspapers of Nigeria Plc.. All Rights Reserved.
Business

Mounting deficits raise concerns over bank takeover as Ikeja Electric reports N25bn pretax loss

Chima Nwokoji
August 8, 2025
Share
on Ikeja Electric Ikeja Electric emerges best performing Disco in 2022, Ikeja Electric, COVID-19
SHARE

EFFORTS by Nigerian banks to take over Sahara Group’s power assets may be complicated by the deepening financial woes of Ikeja Electricity Distribution Company (Ikeja DisCo), which posted a pretax loss of N25.2 billion for the full year ended December 31, 2023.

The company’s latest financials revealed worsening fundamentals that raised red flags for potential acquirers. Despite recording a 21.6 percent increase in revenue to N207.34 billion—up from N170.4 billion in 2022—soaring costs and operating inefficiencies continued to erode profitability.

Distribution and administrative expenses jumped 25.7 percent to N55.7 billion, while net finance costs surged by 70 percent to N10.34 billion in 2023. A tax credit of N21 billion helped cushion the blow, reducing after-tax loss to N4.1 billion from a previous profit of N33.96 billion in 2022. Nonetheless, accumulated deficits rose to a record N177.05 billion from N172.88 billion a year earlier, highlighting the company’s persistent losses.

Among the most pressing concerns is a tariff shortfall of N83.64 billion and trade payables totaling N115 billion. The company’s current liabilities of N183.46 billion far exceed its cash and bank balance of N23.01 billion, resulting in a negative working capital of over N160 billion.

Employee benefit expenses stood at N12.47 billion, while staff welfare and contract labor costs added N121.89 million and N1.64 billion, respectively—bringing total personnel-related spending to N14.52 billion. Repairs and maintenance expenses were N2.4 billion.

Ikeja DisCo’s biggest expense remains energy purchases, with the company spending N215.31 billion on electricity sourced from the Nigerian Bulk Electricity Trading (NBET) Plc. This accounts for the lion’s share of the company’s rising cost of sales.

Total loans and borrowings stood at N39.2 billion, while total financial liabilities—including trade and other payables (excluding statutory deductions)—amounted to N173.94 billion.

Analysts say the company’s prolonged losses and weak balance sheet make it a less attractive asset for lenders aiming to recover outstanding debts.

Ikeja DisCo is a beneficiary of the Central Bank of Nigeria’s (CBN) Operating Expenditures (OPEX) loan, a special facility designed to support power distribution companies in meeting their minimum market remittance obligations and operational expenses.

The 10-year loan was extended at a subsidised interest rate of five percent annually up to February 28, 2023, and nine percent thereafter.

In addition, the company secured a N2.9 billion loan from Sahara Power Group Limited on May 1, 2022. This 12-month facility, offered at an 18 percent interest rate, was used to finance technical upgrades.

By the end of 2023, the full amount had been drawn, up from N2.4 billion in 2022. Another loan agreement worth N3 billion was executed in April 2023, also at 18 per cent interest over 24 months, with N1.6 billion disbursed by year-end.

Ikeja DisCo’s troubling financial position comes amid an ongoing legal battle between Sahara Group and a consortium of Nigerian banks seeking to recover loans said to total N1.1 trillion.

The banks involved include Access Bank, First Bank, Zenith Bank, UBA, Union Bank, FCMB, Fidelity Bank, Keystone Bank, and Sterling Bank.

Through their appointed trustee, First Trustees Limited, and facility agent, FBNQuest Merchant Bank, the banks appointed Kunle Ogunba (SAN) as receiver over Sahara’s assets on July 19, 2025. In response, Sahara Group swiftly filed lawsuits to halt the receivership process.

On August 5, 2025, the Federal High Court in Lagos, presided over by Justice Akintayo Aluko, issued an injunction restraining the banks and the appointed receiver from taking adverse actions against the power companies. The ruling protects Egbin Power Plc, Ikeja Electric Plc, and First Independent Power Limited (FIPL) from enforcement actions related to the disputed debt.

Babatunde Osadare, Chief Legal and Regulatory Officer of Ikeja Electric, said the ruling bars the receiver from accelerating the loan, interfering in business operations, enforcing share security, or acting unilaterally on financial documents.

Ikeja Electric Plc operates within a franchise covering six business units: Ikeja, Oshodi, Shomolu, Ikorodu, Akowonjo, and Abule-Egba. The company acquired these assets in 2013 during the federal government’s power sector privatization program.

The assets were sold to the New Electricity Distribution Company (NEDC) consortium—comprising Sahara Group and Korean Electric Power Corporation (KEPCO), which serves as the technical partner. Ownership was formally transferred on November 1, 2013.

Kepco Energy Resources Limited holds a 70 percent stake in Egbin Power Plc; NG Power HPS Limited, a Sahara subsidiary, owns 70 percent of First Independent Power Limited while New Electricity Distribution Company Limited controls 70 percent of Ikeja Electric.

Analysts believe that with mounting liabilities, ballooning deficits, and a court-ordered injunction freezing lender actions, the future of Sahara Group’s energy holdings—including IkejaDisCo—remains mired in uncertainty. For banks, the combination of weak financial performance and legal obstacles poses significant challenges in their pursuit of loan recovery.

READ ALSO: Egbin Power, Ikeja Electric, First Independent Power Ltd not in receivership —Management


WATCH TOP VIDEOS FROM NIGERIAN TRIBUNE TV

  • Back to School, Back to Business A Fresh Start

  • Relationship Hangout: Public vs Private Proposals – Which Truly Wins in Love?

  • “No” Is a Complete Sentence: Why You Should Stop Feeling Guilty

  • Relationship Hangout: Friendship Talk 2025 – How to Be a Good Friend & Big Questions on Friendship

  • Police Overpower Armed Robbers in Ibadan After Fierce Struggle


    Get real-time news updates from Tribune Online! Follow us on WhatsApp for breaking news, exclusive stories and interviews, and much more.
    Join our WhatsApp Channel now


TAGGED:bankIkeja Electric
Share This Article
Facebook Email Print
Previous Article image of Akinwumi Adesina Dangote Refinery signals Akinwumi Adesina set to bow out of AfDB as delegates meet in Abidjan, Dangote Refinery signals Africa’s business viability —AfDB
Next Article Sheriff Oborevwori, renewable energy for industrial development Oborevwori’s governance people in Delta Oborevwori tasked on Image of Sheriff Oborevwori real change Oborevwori’s two years Gov. Sheriff Oborevwori of Delta State on rent, Oborevwori’s China visit, Delta Central APC Oborevwori leading APC Delta, human trafficking in Delta, projects for commissioning, Oborevwori urges Delta youths, Delta NYSC road construction, Why we approved new retirement age for associate professors — Delta govt LGs can drive real change —Delta gov

Frontpage Today

Subscribe to e-Paper

E-Vending, e paper, pdf, e-paper, Tribune
WOMEN

Xquisite
Xquisite Food
Xquisite Style
Wondrous World of Women

MORE

Business Coach
Education
Event Digest
Crime & Court
Do It Yourself
Ecoscope
Property & Environment
Energy
Maritime
Aviation
Brands & Marketing
Agriculture
Info Tech
Labour
Leadership & Management
Achievers
Arewa Live
Arts & Culture
Arts & Reviews
Campus Beat
Politics
Health News
MORE

Mum & Child
Natural Health
Sexuality & Health
Special Report
Sports
Tourism
Travelpulse & MICE
Tribune Business
Weekend Lagos
Youth Speak
Book Review
Thursday Tales
EDITORIAL

Editorial
Opinion
Letters
News Extra

BUSINESS

Capital Market
Money Market
Economy

ENTERTAINMENT

Friday Treat
Entertainment
Razzmattaz

REGIONS

South West
Niger Delta
Arewa

RELIGION

Tribune Church
Church News
Muslim Sermon
Eye of Islam
Islamic News

COLUMNS

Anike's Diary
Aplomb
Ask The Doctor
Autoclinic With The Mechanic
Awo's Thought
Borderless
Crucial Moment
Empowered For Life
Festus Adebayo's Flickers
Financewise
Gibbers
Intimacy
Language & Style
Leaders' Forum
Leadership & Management
Lynx Eye
Monday Lines
Mum & Child
Natural Health
Notes from Atlanta with Farooq Kperogi
On The Lord's Day
PENtagon
Political Panorama
Veritatem With Obadiah Mailafia
Voice of Courage
Whatsapp Conversation
You and Eye
Your Life Counts

© 2025 African Newspapers of Nigeria Plc. All Rights Reserved.
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?