19 February 2013

Nigeria: Alscon Sale - BPE Rejects Meeting Preferred Bidder

Abuja — The implementation of the Supreme Court ruling on the sale of the Aluminium Smelter Plant at Ikot Abasi, Akwa Ibom State, is facing some hiccups, as the Bureau for Public Enterprises, BPE, has rejected any meeting with the preferred bidder, Bancorp Financial Investment Group, BFIG, to sort out the real worth of the firm.

Although the apex court had ruled that the two sides should meet, evaluate and ascertain the true worth of the plant before signing the Share Purchase Agreement, SPA, the BPE had insisted that the court ruling was clear and did not call for any meeting between them.

Armed with the SC ruling dated July 6, 2012, BFIG had approached the government agency to arrange a visit to the Ikot Abasi plant to ascertain the state of the plant and the real value of the assets so as to determine how much should be paid to the Nigerian government.

However, when BPE and BFIG had agreed on a date for the inspection, the Russian firm, currently managing the plant illegally, having been sacked by the SC, rejected the move and vowed not to allow any member of the American group or the Nigerian Police to enter the plant for the purpose of the inspection.

Claiming to be acting on the same SC ruling, the BPE on January 29, wrote BFIG offering it 77 percent of the shares of ALSCON, which it mistakenly referred to as Aluminium Shelter Company of Nigeria and asked the firm to pay the sum of $41 million, which is ten percent of the bid price of $410 million it offered in 2004.

In the same letter, BPE forwarded the SPA, which the National Council on Privatisation, NCP, approved on January 22, 2013, to BFIG and asked it to pay the sum of $41 million to the agency within 15 days of the execution of the SPA.

The letter, which was signed by the Acting Director General of BPE, Benjamin Dikki, explained that the actions were taken in full strict compliance with the SC ruling.

But BFIG, through its counsel, Jimmie Williams, Jr. in a letter dated February 13, 2013, and addressed to the BPE's Chief Legal Counsel, Joseph Ujomu, faulted the agency on the purported "offer letter and invitation to BFIG to acquire shares in ALSCON" instead of implementing the mutually-binding SPA of May 20, 2004, as affirmed by the SC.

BFIG noted that the shares of ALSCON had plummeted from $1.1 billion in 2004 to a mere $91 million in 2013 and asked BPE to take note of that and determine a new price for it to pay to the Nigerian government.

But in responding to that, BPE in another letter dated February 6, 2013 and signed by the DG, Benjamin Dikki noted, "We hereby reiterate our position contained in our letter of Februry 1, 2013. The implementation of the SC judgement does not raise any contentious issue and therefore there is no need for a meeting as requested."

But at a media briefing in Abuja, the Chief Executive Officer, Dr. Reuben Jaja, announced that the firm had signed the SPA and sent it to BPE last Wednesday and was expecting a response and account details of the agency so as to effect the ten per cent payment in line with the SPA.

"We have the money with our bankers and we are ready to transfer the funds into BPE's account once they countersign the SPA and give us the account to remit the money into.

"We want Nigerians to be rest assured that despite what appears as a deliberate attempt to frustrate BFIG from taking over and revamping ALSCON, we are fully committed to changing the fortunes of the firm so as to give jobs and opportunities to Nigerians,"Jaja said.

Meanwhile, BFIG has filed a $2.8 billion lawsuit at the Federal High Court Abuja against RUSAL for undue interference with its business, conspiracy to defraud the firm and for unfair competition arising from the bid process.

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