N25.3b debt: Keystone Bank takes over Bacita Sugar Company, appoints receiver

…court freezes 21 accounts of KIA Africa

Keystone Bank has taken over Bacita Sugar Company, known as Josepdam Sugar Company, following its failure to settle a debt of N25,358,203,258.09.

The bank has also appointed Mr Yunus Abdulsalam (SAN) as the receiver/manager of the firm with immediate effect.

This development follows an order of the Federal High Court in Ilorin, which mandated the bank to recover its debt from KIA Africa Group, which had 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, directed Keystone Bank to take over the management of all assets of the firm.

The judge said, “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 charge 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 1st Applicant.

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“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 situated at Josepdam Sugar Factory, Bacita Layout, Kwara State.

“An order of this Honourable Court is hereby made directing the Inspector General of Police, Assistant Inspectors General of Police, all Commissioners of Police in any judicial divisions of this Court, including the Commissioner of Police in charge of Kwara State, his Deputy and all other Police Officers under them, and all the Sheriffs of this Court in any of the judicial divisions of this Court to assist the 2nd Applicant as the Receiver/Manager in the enforcement of the Orders of this Honourable Court pursuant to the application.

“An order of this Honourable Court is further granted directing (i) First Bank of Nigeria Limited, (ii) Access Bank Plc, (iii) Citibank Nigeria Ltd, (iv) Ecobank Nigeria Plc, (v) Fidelity Bank Plc, (vi) First City Monument Bank Plc, (vii) Guaranty Trust Bank Plc, (viii) Polaris Bank Ltd, (ix) Providus Bank, (x) Stanbic IBTC Bank Plc, (xi) Standard Chartered Bank Ltd, (xii) Sterling Bank Plc, (xiii) Union Bank of Nigeria Plc, (xiv) United Bank of Africa Plc, (xv) Unity Bank Plc, (xvi) Wema Bank Plc, (xvii) Zenith Bank Plc, (xviii) Globus Bank Ltd, (xix) Heritage Banking Company Ltd, (xx) SunTrust Bank Nigeria Ltd, (xxi) Titan Trust Bank Ltd to freeze all accounts belonging to the Respondent and that of its alter ego, Barr. Kenneth Irihiogbe, to depose to a verifying affidavit confirming compliance with the Order of this Honourable Court pending the complete takeover of possession and control of the Respondent’s assets by the 2nd Applicant.”

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’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 outrightly disposing of the sugar 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 the bank’s takeover in all 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 availed KIA Africa Group a series of loan facilities for the sole purpose of acquiring the sugar factory on a mutually revised 24-month repayment plan.

In a further attempt to secure full ownership of Josepdam Sugar Company, KIA Africa sought a bank guarantee from Keystone Bank amounting to N8,323,649,250.00—representing 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 Irihiogbe.

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

After exhausting all entreaties for the loan repayment and with the total debt ballooning to N25.3 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 new management of the bank, led by its CEO, Mr Hassan Imam, has aggressively embarked on a strategic debt recovery drive against recalcitrant obligors.

“KIA Africa Group in 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 for 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.”

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