26 November 2012

Nigeria: PHCN - BPE Receives U.S.$335.9 Million Bank Guarantees From Preferred Bidders

In line with the payment mechanism for the privatisation of the Power Holding Company of Nigeria (PHCN) successor generation and distribution companies, the Bureau of Public Enterprises (BPE) Friday received bank guarantees worth $335,854,986.15 from the preferred bidders for the enterprises.

At its sixth meeting for 2012 which held on October 29 in Abuja, the National Council on Privatisation (NCP) approved the payment mechanism for the PHCN successor generation companies (Gencos) and successor distribution companies (Discos).

It involves 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%) of the transaction value to the Bureau of Public Enterprises (BPE).

The preferred bidders, according to a statement from BPE, are required within 15 business days of notification from the BPE to submit a "Preferred Bidder's Bank Guarantee." The deadline for receipt of the bank guarantee was last Friday.

But the preferred bidders for the Discos submitted bank guarantees worth $188,476,306.00 while the preferred bidders for Gencos submitted bank guarantees worth $147,378,680.15.

"The breakdown for the discos is as follow: Abuja Disco: Kann Consortium Utility Company Ltd - $24,600,000.00; Benin Disco: Vigeo Power Consortium - $19,350,000.00; Eko Disco: West Power and Gas - $20,250,000.00; Enugu Disco: Interstate Electrics Ltd - $18,900,000.00; Ibadan Disco: Integrated Energy Distribution and Marketing Ltd - $25,350,000.00; Ikeja Disco: NEDC/KEPCO Consortium - $19,650,000.00; Jos Disco: Aura Energy Ltd - $12,300,000.00; Kano Disco: Sahelian Power Ltd - $20,550,000.00; Port Harcourt Disco: 4Power Consortium - $18,636,306.00; and Yola Disco: Integrated Energy Distribution and Marketing Ltd - $8,890,000.00", the statement said.

For the Gencos, BPE gave the breakdown as follows: "Shiroro Hydro Power Plc: North-South Power Ltd - $16,748,180.00; Kainji Hydro Power Plc: Mainstream Energy Solutions - $35,680,500; Sapele Power Plc: CMEC/EURAFRIC Energy Ltd - $30,150,000.00; Geregu Power Plc: Amperion Power Distribution Limited - $19,800,000.15; Ughelli Power Plc: Transcorp/Woodrock/Sumbion/Medea/PSL/ Thomassen - $45,000,000.0".

The statement said the next stage in the privatization process is that the designated preferred bidders will be invited 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%) 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 mutually agreed upon time, the bidder will be required to pay the outstanding seventy five per cent (75%) of the share purchase price to complete the transaction. 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 handover of the successor company to the Preferred bidder will conclude the transaction, BPE said.

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