Keystone Bank Takes Over Bacita Sugar Company Over ₦25.3bn Debt

Keystone Bank has taken control of Bacita Sugar Company (formerly Josepdam Sugar Company) following the company’s failure to settle a debt of ₦25,358,203,258.09.

In line with a Federal High Court order in Ilorin, the bank appointed Mr. Yunus Abdulsalam (SAN) as the Receiver/Manager to recover the outstanding loan from KIA Africa Group, the new owner of Josepdam Sugar Company.

The court also froze 21 accounts belonging to KIA Africa Group. Presiding Judge, Justice A.O. Awogboro, ruled that Keystone Bank should assume full control over the company’s assets. The court granted the bank authority to take possession, manage, and, if necessary, sell the assets to recover the debt.

At the scene of the enforcement, a Keystone Bank representative stated:

“Keystone Bank has officially taken over Bacita Sugar Company in Kwara State due to KIA Africa Group’s inability to settle its ₦25.3 billion debt. The takeover is necessary to either manage or dispose of the sugar factory and use the proceeds to offset the outstanding loan.”

The court also directed the Nigeria Police Force to ensure the bank’s takeover was executed without obstruction.

KIA Africa Group purchased Josepdam Sugar Company from the Asset Management Corporation of Nigeria (AMCON) and secured financial backing from Keystone Bank. As part of the agreement, Keystone Bank issued a ₦8,323,649,250.00 Bank Guarantee—75% of the balance purchase price payable to AMCON—on the condition that KIA Africa would provide the company’s title documents as collateral.

However, KIA Africa failed to fulfill this obligation, leading to a surge in its financial liabilities. After exhausting all efforts to recover the loan, Keystone Bank invoked its rights under the Debenture Deed and appointed a Receiver/Manager to take control of all KIA Africa Group’s assets, including Josepdam Sugar Company.

The bank’s management, under CEO Mr. Hassan Imam, has been implementing an aggressive debt recovery strategy against defaulters.

KIA Africa’s Initial Plans for the Sugar Company

When KIA Africa acquired the sugar company in 2021, it announced ambitious plans to revitalize its operations. The company stated:

“With 30,000 hectares of land, including 5,600 hectares of developed farmland for sugarcane production, an installed milling capacity of 40,000 tons for refined sugar, an ethanol production plant, and new mill and power equipment awaiting installation, Bacita Sugar Company is set to become a key player in the industry. KIA Africa Group is committed to making this vision a reality.”

Despite these promises, financial challenges ultimately led to the bank’s takeover of the company.