30 March 2014

Ethiopia: Three Further Public Enterprises Approved for Privatisation

Those that received final approval were three from the five that attracted bidders during the last offer

Ethiopian Pharmaceutical Manufacturing S.C, Hamaressa Edible Oil S..C and Bekelcha Transport S.C are all switching over to private ownership, following the final approval, by the Privatisation & Public Enterprises Supervising Agency (PPESA), of the offers made for them.

Only three of the five public enterprises that attracted bidders during the financial opening passed the technical evaluation and got the final approval of the Agency.

From the 11 enterprises offered for sale by the PPESA on February 10, 2014, only five attracted bidders. These included the three whose transfer was approved on Friday, March 29, 2014, in addition to Kombolcha Textile S.C. and Caustic Soda S.C.

The Ethiopian Pharmaceutical Manufacturing S.C will go to Medi Tech Ethiopia Plc, which offered 436.6 million Br - exceeding competing bids from Sachem Import & Export Plc, Bak Byte Industrial Plc, Beker General Business Plc and Horn Investment Plc, whose offers ranged from 236 million to 351 million Br.

Tikur Abay Transport S.C's offer of 325.9 million Br for the purchase of Bekelcha Transport S.C was also approved. Ethio Asian Industries Plc has bought Hamaressa Edible Oil S.C for 50.5 million Br.

The rejected offers included a one million dollar bid from Metel Mohammed Enterprise Tanzania Ltd for Kobmolcha Textile SC, and Complay Industrial Plc's one million dollar offer for Caustic Soda S.C.

In May 2012, MCC Imports Enterprise offered 14.8 million Br to acquire this factory. This offer was approved by the board of the Agency, but the buyer suddenly discovered all the debts the company had owed, which, if it paid, as the PPESA expected, would lift its payment up to 123 million Br.

The documents at the company indicated that the factory not only had unpaid loans, but also income tax, withholding tax and Value Added Tax (VAT), which it should have transferred to the Ethiopian Revenue and Customs Authority (ERCA) but did not.

After that, the Agency floated tender for the privatisation of Caustic Soda three times, without being able to attract any bidder. When Caustic Soda was offered for privatisation for the fourth time in the last tender.

The enterprises that failed to attract any bidders were - the Ethiopian Minerals Development S.C, Bahir Dar Textile S.C, Weyra Transport S.C, Artistic Printing Enterprise, Agricultural Mechanisation Service Enterprise and Transport Construction Design S.C, auctioned for the fourth round of 2013/14 fiscal year.

Kombolcha Textile S.C was also auctioned with those companies.

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