Charles Ozomena & Emma Ujah
11 October 2005
Abuja — AS bids for the sale of Nicon Insurance PLC and Nicon Hilton Abuja opens today the National Council on Privatisation (NCP) rose from its 42nd meeting yesterday in Abuja approving the increase of equity to be offered to the Core investor in the sale of NICON Insurance Plc, from 51% originally advertised to 70%. Meanwhile, the National Council on Privatization (NCP) has cancelled the bid of the management of the NICON Insurance Plc to acquire the corporation through a Management Buy-Out arrangement.
NCP's decision to disqualify NICON management from the race, it was learnt, was reached in Abuja, yesterday, following the investigations of the alleged withdrawal of N150 million from the pension fund of the corporation, by the management.
The Priscilla Soares management at NICON had floated a Special Purpose Vehicle, Garston Derek-Jones Nigeria Ltd, to buy the organisation in the on-going privatization exercise but the arrangement ran into a controversy when the staff discovered that they were not part of the deal.
Minister of Information and National Orientation Mr. Frank Nweke who briefed State House Correspondents at the end of the marathon meeting told Reporters that prospective investors had requested for an increase in the percentage equity offering to 100%.
constituencies"."The increase in equity to the core investor became necessary as a result of identified net deficit ofabout N4.577 billion in NICON financial statements as at June 2005 requiring the investor to have a totalmanagement control to turn around the fortunes of the company", he explained.He said that NCP approved, in line with extant policy, the appointment of governance issues auditor to probethe affairs of NICON Insurance.On the sale of the Federal Superphosphate Fertilizer Company (FSFC) Kaduna, Nweke revealed that the meeting presided by Vice President Atiku Abubakar approved Hekio Consortium Ltd approved as preferred bidder for the acquisition of the 90% equity of the Fertilizer Company, at the offer price of N700 million. The remaining 10% will be offered to the workers of the company.The meeting further "approved the re-capitalization of the MINT from the privatization proceeds in order to achieve Nil importation of currency from January 2007 and also to meet the banknote and security documents requirements of not only Nigeria, but also West and Central Africa.
About N17 billion is being proposed for the re-capitalization which Council noted, would be recovered from the proceeds from the sale of the company. You would recall that privatization of MINT was deferred and handed over to the Central Bank of Nigeria (CBN) to manage for a minimum of three (3) years and a maximum of five (5) years", the Information Minister said.Currently Central Bank Nigeria owns 77% equity shares of MINT, De la Rue of France 2.94%, and Bureau of Public Enterprises 20.06%On the Privatisation of the Nigerian Telecommunications Limited (NITEL), Council, he said "noted the advanced stage reached in the privatization of NITEL and in order to provide additional cover toprospective investors in the process has re-iterated the Federal Government of Nigeria's commitment tofunding of Pension Fund |liabilities for NITEL & MTEL."In line with this, Council has approved that the Federal Government assume all historical andoutstanding liabilities arising from the pension fund deficits for NITEL and MTEL.
Council also approvedthat the in-coming core investor, whilst responsible for ensuring that the fund is funded and in compliancewith provisions of the Pensions Actpost-privatization, is insulated from all historical and outstanding liabilities. The BPE had determined,in conjunction with actuarial advisers, that the staff pension scheme of the company has deficit in the sumof N60 billion as at 30 June 2005. "Council also approved payment of debts owed to NITEL by other Federal Government agencies and parastatals.Other decisions of the Council were approval of the BPE audited accounts for the period that ended 31December 2003 and 2004, executed by the Akintola Williams Deloitte, approval for the commencement of the privatization of Power Holding Company of Nigeria(PHCH) starting with the Abuja Distribution Company and the Transmission Company.
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