1 February 2013

Nigeria: FG Bows to Supreme Court Order, Transfers ALSCON to BFIG

The federal government has finally given in to the Supreme Court judgement ordering the transfer of Aluminium Smelter Company of Nigeria (ALSCON), Ikot-Abasi to BFI Group Corporation.

To this effect, the Bureau for Public Enterprise (BPE) has offered a formal letter of transfer of ALSCON to BFIG.

A statement signed by BPE said, this was done in compliance with the Supreme Court judgment of July 6, 2012.

The statement said, "The Bureau of Public Enterprises (BPE) has transmitted an offer letter and the Share Purchase Agreement (SPA) in respect of Aluminium Smelter Company of Nigeria (ALSCON), Ikot-Abasi to BFI Group Corporation.

This development follows the directive of the National Council on Privatisation (NCP) which met at the Presidential Villa, Abuja on January 22, 2013.

With this development, BFIG, the plaintiff in the suit at the Supreme Court, is expected to execute the Share Purchase Agreement and pay the agreed 10 per cent of the offer price of $410 million (which is $41 million) within 15 days of the execution of the SPA.

Recall that Nigeria's apex court had stated among other averments that "an order of specific performance is hereby decreed mandating the respondent to provide the mutually agreed share purchase agreement for execution by the parties to enable the plaintiff pay the agreed 10 per cent of the accepted bid price of US $410 million (i.e, the sum of US $41 million) within 15 working days from the date of the execution of the Share Purchase Agreement in accordance with agreement dated 20/5/2004 and the 90 per cent balance of bid price shall be paid within 90 calendar days.

"It is declared that the defendant is bound to accept payment of 10 per cent of the bid price from the appellant (BFIG Group Corporation) within 15 days from the date of signing the share Purchase Agreement (SPA) by the parties."

The Supreme Court had in July 2012 ruled that BFIGroup, the Nigerian-American consortium that emerged the preferred bidder for the Aluminium Smelter Company of Nigeria (ALSCON, Ikot Abasi, Akwa Ibom State, in 2004, but was disqualified in controversial circumstances by the Bureau of Public Enterprises (BPE), was the valid winner of the bid.

BFIGroup, which was pre-qualified as one of the two core investors interested in acquiring the 77.5 per cent federal government equity in the $3.2billion plant, was declared winner of the bid for the plant by the National Council on Privatisation (NCP) after its $410million offer proved superior to the $160million by its, UC Rusal.

Prior to the June 14, 2004 scheduled financial bid opening exercise, BFIGroup was prequalified to stand for the bid having completed due diligence on the plant as well as other necessary processes stipulated by the NCP, including conditions spelt out in a resolution during the May 20, 2004 Technical Bid Conference by all participants in the bid process.

Some of the conditions included the payment of $1million cash bid bond, submission of a list of preferred banks in Nigeria and overseas where the bond could be procured, and a court of notarisation of the bid bond.

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