UBA Sues To Void AMCON’s N100bn Sale Of IBEDC, Alleges Breach Of Consent And Undervaluation

The United Bank for Africa Plc (UBA) has filed a legal challenge seeking to nullify the sale of a 60% stake in the Ibadan Electricity Distribution Company (IBEDC) by the Asset Management Corporation of Nigeria (AMCON), alleging that the N100 billion transaction was conducted without its consent, violated due process, and grossly undervalued the asset.

The bank, which is a key lender to Integrated Energy Distribution and Marketing Limited (IEDM)—the original holder of the IBEDC stake—described the divestment as unlawful and opaque. UBA insists the sale is sub judice and in contempt of court, as the matter is currently before Justice Akintayo Aluko of the Federal High Court, Lagos.

AMCON Managing Director/CEO, Gbenga Alade, had on Thursday confirmed the sale during a press briefing in Lagos, where he decried the actions of loan defaulters and announced the divestment as a strategic step. However, UBA quickly fired back, stating that the press conference was an affront to the ongoing judicial process and hinted at initiating contempt proceedings against AMCON.

UBA, the plaintiff in the case, listed AMCON, Polaris Bank, and Archlight Nigeria Limited—the company to which the stake was sold—as first, second, and third defendants respectively.

At the July 3 court session, counsels for Polaris Bank and Archlight Nigeria Ltd—Dr. Chika Agbu, SAN, and Babatunde Ogala, SAN—acknowledged pending motions filed by UBA seeking to vary an earlier court order. Both informed the court that they were not ready to proceed due to late service and incomplete documentation. The matter was adjourned to October 2, 2025, for hearing of all outstanding applications.

In its court filings, UBA maintained that AMCON’s unilateral sale of the stake violated the terms of a 2013 syndicated loan agreement, under which IEDM obtained $162.4 million from several banks to acquire the 60% equity in IBEDC during the power sector privatization. UBA contributed $35 million to the facility—21.5% of the total loan—while Polaris Bank (then Skye Bank) served as Facility Agent.

Following IEDM’s default, AMCON took over its interest in IBEDC and appointed a Receiver/Manager in August 2021. However, UBA contends that AMCON also assumed the role of Facility Agent without the approval of the lenders and initiated a divestment process without seeking consent from the financing banks.

UBA’s recovery officer, Afamefuna Ogbonna, in a sworn affidavit, revealed that AMCON selected Archlight Nigeria Ltd as the preferred bidder despite its failure to submit a bank guarantee. The bank also alleged that no independent valuation or share purchase agreement was provided to lenders, undermining transparency and accountability.

The bank noted that in a pre-action notice dated April 28, 2025, it warned AMCON about the illegality of the sale. AMCON responded on May 16, but failed to address the bank’s core concerns.

UBA also challenged the reported N100 billion transaction value, stating that it represents less than 20% of the stake’s fair market value, which the bank estimated to exceed N1 trillion. The bank argued that such a low figure is detrimental to its financial interests and that of other lenders, as it could erode their ability to recover the outstanding loan balance.

UBA has therefore asked the court to grant interlocutory injunctions restraining AMCON, Polaris Bank, Archlight Nigeria Ltd, and their agents from disbursing any funds or taking further steps regarding the IBEDC divestment until the final determination of the case.

The bank emphasized its fiduciary duty to protect depositors’ and shareholders’ funds, noting that the over N70 billion exposure from the IEDM default continues to accrue interest and could severely affect its financial stability if not recovered.

UBA is urging the court to set aside the transaction entirely, describing it as a breach of contract, a violation of due process, and an act executed in bad faith without proper consultation with key stakeholders.