Lagos moves to buy out stakes in Lekki Concession Company, as Assembly approves Sanwo-Olu’s $53.9m request
Lagos State Government is set to buy out the stakes of other shareholders in the Lekki Concession Company (LCC), which operates the Lekki toll plaza, making it the sole owner.
This followed the approval of Governor Babajide Sanwo-Olu’s loan request of $53.9 million by the Lagos House of Assembly.
In June, the Mr Mudashiru Obasa-led house received the request for the conversion of an African Development Bank (AfDB) loan to LCC as a privately owned company of the state government and to assume full ownership.
It was then committed to Committee on Finance to further look into it and report its findings to the House.
Giving his presentation, Chairman of the Committee, Mr Rotimi Olowo, posited that upon the buy-out of all the shareholdings interest of the Concession Company Limited by the state; Lagos State Government became the subsisting shareholders of LCC with 75 per cent shareholding and the Office of Public-Private Partnerships (PPPs), shareholding 25 per cent respectively.
He further stated in the report that the original $53.9 million loan obligation from a private sector facility, AfDB had been resolved after series of engagements between AfDB, LCC and the state government to convert the loan to a public sector facility with the benefit of a considerable reduction in interest charges of 1.02 per cent of $1.12 million bi-annual as against the 4.12 per cent of $2.746 million per bi-annual thus giving a savings of $1.16 million bi-annual or $3.24 million per annum.
The House, therefore, granted the executive the approval to convert the AfDB loan to the public sector loan backed up by a sovereign federal government guarantee on behalf of the state government.
It also authorised the state government to issue a counter-guarantee in favour of the federal government along with an Irrevocable Standing Payment Order (ISPO) to deduct from Lagos State Government statutory allocations.
According to the report, the servicing of the loan obligations would mature in August 2034.
Speaker of the House, Mr Mudashiru Obasa, following deliberations, directed the Acting Clerk of the House, Mr Olalekan Onafeko, to send a clean copy of the resolution of the House to the Governor.
