Lagos Government denies report to take over Lekki Concession Company

The Lagos State Government has refuted reports that it sought approval from the House of Assembly to take over Lekki Concession Company (LCC).

A statement signed by the state’s Commissioner for Information and Strategy, Mr. Gbenga Omotoso, said: “Reports that the Lagos State House of Assembly has granted the Lagos State Government the go-ahead to take over the Lekki Concession Company (LCC) are false.

“The government did not make such a request. Its request was to convert the African Development Bank (ADB) loan from a private sector (commercial) to a sovereign (public sector) loan, which attracts a lower interest rate. This will enable the company to make some savings.”

The statement said the government had acquired full shares of the former owners of the company in December 2014, made the loan eligible for conversion to a sovereign facility with an attendant significant lower interest rate of LIBOR plus 80 basis points and extended tenor.

It also stated that the sovereign loan conversion will lead to a crash of the applicable interest rate on the facility to circa 1.8 per cent yearly compared to the current interest rate of circa 4.12 per cent yearly and the conversion will increase the tenor of the facility from the current five years to 15 years, which has an impact of spreading the cash flow impact by an additional 10 years.

“One of the requirements stipulated by the Federal Ministry of Finance for the loan conversion is the approval of the Lagos State House of Assembly. This is the approval given by the Lagos State House of Assembly on August 5, 2021, and not an approval for take-over of LCC, as reported,” the statement further stated.

It finally said the state government, after due consultation with all major stakeholders, entered into an amicable settlement option with the shareholders of LCC with a view to bringing the project back on the path of long-term sustainability, acquired the full shares/equity of the previous owners, thereby assuming full ownership of LCC in December, 2014.