16 October 2012

Nigeria: Abdulsalami, Tinubu-Backed Firms Jostle for Discos Tuesday

The National Council on Privatisation (NCP) will Tuesday open the commercial bids submitted by investors, including Oando Consortium, Honeywell Energy Resources International Limited, Integrated Energy Distribution and Marketing Limited as well as Vigeo Holdings, which were prequalified on September 18 to have their commercial bids opened for the 10 distribution companies (discos) slated for sale under the privatisation programme.

The 10 distribution assets were created from the unbundling of the Power Holding Company of Nigeria (PHCN) in 2006. However, the sale of one disco - Kaduna Distribution Company Limited - has been deferred as no bidder was prequalified to move on to the next stage of the bid process.

The NCP, which is headed by Vice-President Namadi Sambo, had approved the eligibility of the firms for the exercise, which was initially billed for October 10 but later postponed till today.

Leading the pack of heavyweight promoters linked to some of the companies are former head of state, retired General Abdulsalami Abubakar who is the chairman of Integrated Energy, while the Oando Consortium has the backing of former Lagos State Governor, Senator Bola Tinubu.

Others include Interstate Electrics Limited fronted by Emeka Offor; Honeywell led by corporate guru, Oba Otudeko; Vigeo, which has Gbolade Osibodu as its majority shareholder; and states such as Lagos, Ekiti, the South-east states (except Imo) and the South-south states all bidding for the discos

But THISDAY investigations yesterday revealed that only 20 companies would participate in the exercise today at the Transcorp Hilton Hotel as Rockson Engineering, which was among the companies shortlisted, might not be allowed to participate in the commercial bid process. Rockson was prequalified last month to bid for the Port Harcourt, Benin and Ikeja Distribution Companies.

However, the company was blacklisted by the Central Bank of Nigeria (CBN) because of its huge debt profile put at N60.475 billion, rendering it impossible for the company to raise the security for the bid process.

The Bureau of Public Enterprises (BPE), in a statement yesterday confirmed that the commercial bid process would have all the 10 discos participating, but each successful bidder will be limited to acquiring a 60-per-cent stake in the respective discos.

The BPE, it was also gathered, will determine which of the bidders will acquire the assets based on their commercial proposals, not financial proposals.

According to a BPE source, the winners will not be determined on the basis of the highest offers made for the assets, but on the highest aggregate technical, commercial and collection (ATC&C) loss reduction projections over the first five years of operations.

Ten companies, namely Honeywell, Oando, Western Consortium, Integrated Energy, Amperion Power Distribution Company Limited, Vigeo Holdings, Gumco, African Corporation AFC & CESC, Kepco/NEDC Consortium, West Power and Gas, and Rockson Engineering Limited are expected to battle for the ownership of the Ikeja Disco.

In another category, six other companies would also contend for the Eko Disco in today's exercise. They include, Oando, Integrated Energy, Sepco-Pacific Energy Consortium, Honeywell Energy, Kepco/NEDC, and West Power and Gas.

Kann Consortium Utility Company Limited and Interstate Electrics Limited, which also made it to the final round, would go head-to-head for the Abuja Disco, while Rensmart Power Limited, Proglobal Power International Consortium, Interstate Electrics Limited and Eastern Electric Nigeria Limited would do battle for Enugu Disco.

Three other bidders - Western Consortium, Integrated and Kepco/NEDC Consortium - would try to assume control of Ibadan Disco; Aura Energy Limited was the solitary bidder prequalified to have its commercial bid opened for the Jos Disco; while Sahelian Power SPV Limited may have no difficulty taking over the Kano Disco.

For Port Harcourt Disco, with Rockson's possible disqualification, Power Consortium will be the sole bidder; Southern Electricity Distribution Company, Rensmart Power Limited, Vigeo Power Consortium and Rockson Engineering Limited are expected to out-class one another to take control of Benin Disco; while Integrated Energy's bid for the Yola Disco will also be unchallenged as the sole bidder for the asset.

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