Lagos Govt Denies Taking Over Lekki Concession Company

The Lagos State Government has denied media reports that it has taken over the Lekki Concession Company (LCC).

On Monday, the social media was awash with reports that the Lagos State House of Assembly has granted the state government’s request for a full takeover of LCC.

But in a statement on Tuesday by the Commissioner for Information and Strategy, Gbenga Omotoso, the government noted that it actually took over the full ownership of LCC in December 2014.

Omotosho noted that the government’s request was the House of Assembly’s approval to convert the African Development Bank (AfDB) loan from a private sector to a sovereign loan, which attracts a lower interest rate.

According to Omotosho, the loan conversion 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 the conversion of the loan to a sovereign facility. Upon the completion of the conversion, there will be a significant reduction of the 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.”