13 October 2005
Lagos — CAPITAL Leisure and Hospitality Limited emerged the preferred bidder to acquire 51 per cent of NICON Hilton Hotel while Assurance Acquisition Limited was declared winner of the bid for 70 per cent of NICON Insurance Plc.
The financial bids opening for both companies organised by the BPE was held Tuesday in Abuja, with the technical committee chairman of the National Council on Privatisation, Mr. Akin Kekere-Ekun, presiding.
Capital Leisure won the bid with a second round offer of 105 million dollars beating its only competitor.
African Properties Limited (APL), which offered 87.5 million dollars in the second round to the reserve bidder position.
APL had posted a higher first round bid of N70 million dollars as against Capital's 60 million dollars before it lost by a wide margin of 17.5 million dollars in the second round.
APL had in 2002 emerged the preferred bidder for Nicon Hotel with a price of 61.71 million dollars but the exercise was inconclusive due to its inability to meet the payment deadline coupled with other legal issues.
Fight investors had earlier been pre-qualified but only four out of these submitted technical and financial proposals before the August 17, 2005 deadline, with only two meeting the criteria set out.
Capital Leisure and Hospitality Limited a combination of investors in the financial services, property and dredging and hospitality sector of the economy.
Its promoters include Transnational Corporation (Transcorp), NSITF, Kapital Insurance Limited, Harris Dredging and Protea Hotels of South Africa.
Nicon Insurance Plc had four contestants. They are Assurance Acquisition Limited, IGI, CCNL Investors Limited, Zenith General Insurance Company Limited who offered 6.78 million dollars; 11.1 million dollars; 1.960 million dollars and 2.953 million dollars respectively in the first round.
However in the second round, Assurance Acquisition Limited displaced IGI with the highest offer of 46.6 million dollars for 70 per cent share to be declared the winner of the bid.
IGI emerged as the reserve bidder with a price of 26.1 million dollars for 70 per cent share.
Seven investors had been pre-qualified by the BPE but six submitted technical and financial bids out of which four met the criteria set out in the Request for Proposals (RFPs).
A profile on the investors made available by the BPE shows that Assurance Acquisition Limited (AAL) is a consortium of leading financial institutions in banking insurance, fund and assets management, investment banking and mortgage financing.
The consortium is made up of Afribank Nigeria Plc, Niger Insurance Plc, NSITF, Kapital Insurance Limited, APT Securities and Funds Limited and N-Glory Development Limited with net assets worth N50 billion.
The chairman expressed satisfaction with the success recorded in the sale of the two enterprises and express hope that the preferred bidder and winner would pay on schedule.
On the payment mechanism, he said the transactions would "legally come to a close with the signing of share sale purchase Agreement and other related documents."
Capital leisure and Hospitality Limited is expected to pay the initial 50 per cent of the purchase consideration within 10 working days from the date of official notification.
The remaining 50 per cent would be paid within 30 working days from the date of official notification.
In the case of Nicon Insurance Plc, AAL is to pay the initial 10 per cent within seven days from the date of official notification and 90 per cent within 30 working days of official notification.
Kekere-Ekun said the reasons for the difference in the payment arrangement had been explained to the investors but declined to disclose them.
He stressed that the results were subject to the ratification of the NCP but expressed optimism that government would respond positively.
"With what I know about the reserve price, the government may not say 'no', he said and urged the winners to pay within the stated period.
In his reaction, Mr. Charles Allah, the Managing Director/CEO of Northbridge Investment and Trust Limited, the lead advisers to Capital Leisure and Hospitality Limited said they were delighted to have won the bid.
He said they were eargerly awaiting the letter of offer from the BPE as the money for payment was already in the bank.
Nicon Hilton Hotel which started operations on April 14, 1987, with 670 rooms and suites on a 12-storey edifice with many other facilities, occupies and expanse of 199,500sq metres of land.
NICON Insurance was incorporated on July 1, 1969, to break the dominance of the Nigerian insurance industry by foreign companies.
With a paid of share capital of N1 billion, it is one of the most capitalised companies in the insurance industry and controls 25 per cent of the gross premium income of the Nigerian insurance market.
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