15 January 2013

Nigeria: PHCN Privatisation - FG Clears Preferred Bidders for Final Negotiation

The Federal Government has cleared all the preferred bidders for the PHCN successor generation and distribution companies to enter the final negotiation stage on the sale of the electricity firms.

Mr Benjamin Dikki , Acting Chairman, Bureau of Public Enterprises (BPE), stated this on Tuesday in Abuja at a meeting with the preferred bidders.

"The BPE can confirm that its bankers have verified all the bank guarantees provided by the preferred bidders.

"Thus all the bidders are qualified to enter this stage of the privatisation process which is the finalisation of negotiation between the Federal Government and the bidders," he said.

The News Agency of Nigeria (NAN) recalls that in November the BPE announced that it received 335 million dollars from the bidders for both the generation and distribution firms.

Dikki told the bidders that they would be required to make a down payment of 25 per cent of the share purchase price, 15 days after the signing of the Sale and Purchase Agreement or the Shareholders' Agreement.

He said it was only after the finalisation of negotiations that transaction documents for all the companies would be executed.

He, however, noted that the distribution company in Kaduna and the generation company in Afam were exempt from the exercise because no preferred bidder had emerged for the firms.

Dikki assured the preferred bidders and their financiers that government was working assiduously to ensure effective handover of the electricity firms.

He highlighted some measures already attained and being "doggedly pursued" by government to ensure a seamless transition.

According to him, an agreement has been executive by government and labour that guarantees the cooperation of the workforce in the handover process.

He said government was working to raise the finance to effect payment of staff entitlements, adding that the BPE was collaborating with the Ministry of Lands and Housing to resolve land and property titles.

He also said that "high-level government organs" were discussing the funding of Nigeria Electricity Liability Management Company (NELMCO) and the Bulk Trader.

He said the discussions would ensure financial stability of the Nigerian Electricity Supply Industry.

The 11 distribution companies up for sale are located in Abuja, Benin, Enugu, Eko, Ibadan, Ikeja, Port Harcourt, Jos, Kaduna, Kano, and Yola.

The generation companies slated for privitisation are Ughelli Power Plc, Sapele Power Plc, Geregu Power Plc, Kainji Power Plc and Shiroro Power Plc. (NAN)

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