24 November 2012

Nigeria: PHCN Privatisation - FG Receives U.S.$335 Million Bank Guarantees

The Bureau of Public Enterprises (BPE) said Friday that it had received bank guarantees worth $335,854,986 from the preferred bidders for both generation (Gencos) and distribution (Discos) firms under the ongoing privatisation of successor companies of Power Holding Company of Nigeria.

It follows the expiration of the 15-business-day of notification from the BPE for successful investors to submit a "Preferred Bidder's Bank Guarantee."

The deadline for receipt of the bank guarantee elapsed Friday.

The privatisation agency in a statement signed by its spokesman, Chukwuma Nwokoh said $188,476,306.00 worth of bank guarantee was received from preferred bidders for the Discos, while $147,378,680.15 was submitted by investors for the Gencos.

Giving a breakdown of the receipts, the statement said for the Abuja Disco: Kann Consortium Utility Company Ltd provided $24,600,000, while for the Benin Disco, Vigeo Power Consortium provided $19,350,000.00.

West Power and Gas provided $20,250,000.00 for the Eko Disco, while Enugu Disco, which was won by Interstate Electrics Ltd submitted bank guarantee worth $18,900,000.00.

Integrated Energy Distribution and Marketing Ltd provided $25,350,000 for Ibadan Disco while the Ikeja Disco, received $19,650,000 courtesy of NEDC/KEPCO Consortium.

Moreover, Aura Energy Ltd submitted $12,300,000.00 for Jos Disco.

Others are Kano Disco in which Sahelian Power Ltd submitted $20,550,000.00; Port Harcourt Disco raked in $18,636,306 courtesy of 4Power Consortium, while Integrated Energy Distribution and Marketing Ltd submitted $8,890,000.00 for Yola Disco.

For Shiroro Hydro Power Plc, North-South Power Ltd submitted bank guarantee worth $16,748,180.00 while Mainstream Energy Solutions submitted $35,680,500 for the Kainji Hydro Power Plc.

CMEC/EURAFRIC Energy Ltd submitted $30,150,000.00 in bank guarantee for Sapele Power Plc: Amperion Power Distribution Limited provided $19,800,000.15 for Geregu Power Plc. In addition, the $45,000,000.00 was submitted by Transcorp/Woodrock/Sumbion/Medea/PSL/Thomassen for Ughelli Power Plc.

The National Council on Privatisation had approved the payment mechanism for the PHCN successor Gencos and Discos at its sixth meeting, which was held October.

It involved the submission by the preferred bidders of additional bid security in the form of a letter of credit or bank guarantee for fifteen percent (15 percent) of the transaction value to the Bureau of Public Enterprises.

The NCP had also approved the next steps for the conclusion of the privatisation of the generation and distribution companies.

The next stage involves the invitation of designated preferred bidder for negotiations with the BPE.

Within fifteen (15) business days, after signing of the Sale and Purchase Agreement, the Shareholders' Agreement or the Performance Agreement, whichever is earlier, or at a mutually agreed earlier time, the bidder shall make a down payment of twenty-five percent (25 percent of the share purchase price.

Within six (6) months after signing of the Sale and Purchase Agreement or the Shareholders' Agreement, whichever is earlier or a mutually agreed upon time, the bidder will be required to pay the outstanding seventy five per cent of the share purchase price to complete the transaction, the statement explained.

Upon the payment of the 25% of the purchase price, the preferred bidder's bank guarantee will be returned to the bidder.

After the completion of payment, the hand over of the successor companies to the preferred bidders will conclude the transaction.

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