Liability mgt coy to pay N330bn to PHCN creditors

Agbogun said the company needed more than N330 billion to settle creditors of PHCN before a smooth and full privatisation could take place.

Agbogun told newsmen in Abuja that the debts owed by PHCN was quite substantial because it was more than N330 billion and was increasing everyday. He said, “Majority of the debts owed by PHCN are now with the Independent Power Producers, IPPs, who are generating power now and PHCN cannot pay them because of the low tariff it is charging. So, everyday as power is being consumed, we owe the power producers more, but for other liabilities that are stationery or stagnant, such as landed property, nothing is being added to them. However, I am happy to report that close to N120 billion of the debt owed the producers came from the Federal Government and its agencies.

“They include the Federal Inland Revenue Service, ITF and other institutions but we hope to discuss all these with the Ministry of Finance so that we can find a way to swap these liabilities.”

The managing director explained that the agencies were owned by government and that the liability management company would settle the
debts through directive from the Ministry of Finance. Agbogun said NELMCO would find a way to settle debts owed by PHCN and government establishments, adding, however, that some were foreign liabilities, which the Debts Management Office, DMO, would deal with.

He said some power stations, such as Kainji and Jebba were built with foreign loans, noting that the loans had not been fully paid, hence NELMCO would allow DMO to clear up such debts. He listed the debts/liabilities owed by PHCN to include PHCN’s  pensioners, IPPs, financial institutions and other creditors, foreign and local, who had supplied PHCN with materials or services for their functions but are yet to be paid.

According to him, the major challenge facing NELMCO is how to manage the more than 12,000 pensioners from PHCN, who are to be settled before a maximum of five years that the company will last. “NELMCO will be liquidated in a short period because it is a short-term company,” the mmanaging director said.  NELMCO was set up to inherit and resolve outstanding liabilities incurred by PHCN and unions in PHCN and government is required to work out a strategy to resolve all outstanding issues.