By Oyebola Owolabi
Lagos State Government has debunked a report that the House of Assembly has granted its request for a full takeover of the Lekki Concession Company (LCC).
A statement yesterday by the Commissioner for Information and Strategy, Mr. Gbenga Omotoso, said the government’s request was the House of Assembly’s approval to convert the African Development Bank (AfDB) loan from a private sector (commercial loan) to a sovereign (public sector) loan, which attracts a lower interest rate.
This, he said, would enable the company to make some savings.
The statement said: “The government, in fact, acquired the full shares/equity of the former owners of the company in 2014. There was no need to take such a request to the House. Following the government’s full ownership of LCC in December 2014, the loan became eligible for conversion to a sovereign facility, with an attendant significant lower interest rate of LIBOR plus 80 basis points and extended tenure.
“In the recent past, there have been discussions among LCC/LASG, AfDB and the relevant Federal Government Ministries and Agencies concerning conversion of the loan to a sovereign facility. Upon the completion of the conversion, there will be a significant reduction of applicable interest rate and extended tenure.
“The sovereign loan conversion will also lead to a crash of the applicable interest rate on the facility to circa 1.8 per cent per annum, compared to the current interest rate of circa 4.12 per cent per annum. Besides, the conversion will increase the tenure of the facility from the current five years to 15 years. This has the impact of spreading the cash flow impact by an additional 10 years.”
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