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PHCN Assets Sale: 14 Companies Progress to the Next Stage

By on October 30, 2012

National Council on Privatization

The 14 preferred bidders for the Power Holding Company of Nigeria (PHCN) were approved on Monday by the National Council on Privatization (NCP) in the ongoing privatization programme.

 

After the sixth meeting for the year, the NCP, in Abuja named CMEC/Eurafic JV Consortium, Mainstream Energy Solutions Limited, Amperion Power Distribution Company Limited, Transnational Corporation of Nigeria Plc Consortium, and North-South Power Limited as the preferred bidders for the five thermal and hydro power stations being sold by the Federal Government to core investors.

 

On the other hand, billionaire executive, Mr. Emeka Offor who failed the consistency test conducted by the Nigerian Electricity Regulatory Commission (NERC) was forced to settle for only Enugu Disco.

 

Vigeo Power Consortium was called the preferred bidder for the distribution company when NCP had disqualified Southern Electricity Distribution Company for submission of multiple bids for Benin Disco.

 

Mr. Atedo Peterside said Amperion with a bid of $132,000,000 was the preferred bidder for the core investor sale of 51 per cent of the shares of Geregu Power Plc. He disclosed this at a press briefing on Monday at the State House, Abuja.

“NCP approved that North-South Power Ltd which offered an annual fee of $23,602,484.87 and a commencement fee of USD$111,654,534 is the preferred bidder for the concession of Shiroro Hydro Power Plc.

 

“The privatisation body also approved that Transcorp/Woodrock/Sumbion/Medea/PSL/ Thomassen with a bid of $300,000,000 is the preferred bidder for the core investor sale of 100% shares of Ughelli Power Plc, while Amperion with a bid of $252,000,000 was approved as the reserve bidder for Ughelli Power Plc,” he said.

 

Explaining the bids Peterside said, CMEC/Eurafic was approved with a bid of $201,000,000 and was chosen as the preferred bidder for the core investor sale of 100% shares of Sapele Power Plc, while JBN-Nestoil Power Services Ltd with a bid of $106,500,000 was selected the reserve bidder for the same power company.

 

Given that Amperion is the preferred bidder for Geregu Power Plc, NCP also approved Feniks Electricity Limited as the reserve bidder for Ughelli Power Plc subject to its bid being revised to match the reserve price, he added.

 

Peterside also said KANN Consortium Utility Company Limited was selected the preferred bidder for Abuja Disco, Vigeo was selected for the Benin Disco and West Power & Gas for Eko Disco. Others were Interstate Electrics selected for the Enugu Disco and Integrated Energy Distribution & Marketing Limited for the Ibadan and Yola Discos respectively.

 

In addition, 4Power Consortium emerged as the preferred bidder for the Port Harcourt Disco, Aura Energy Limited for the Jos Disco and Sahelian Power SPV Limited for the Kano Disco.

 

Additionally, the Honeywell Consortium and Eastern Electric Nigeria Ltd took the position of reserve bidders for Eko and Enugu Discos.

 

Peterside clarified that the NCP had also approved the next steps for the conclusion of the privatisation exercise for the power utilities as well as disclosing clarifications on the payment terms for the Gencos and discos.

In his words, “Following NCP’s approval of the results of the financial bids, the highest ranked bidder for each generation or distribution company would be required to post an additional bid security (‘Preferred Bidder’s Bank Guarantee’) in the form of a Letter of Credit or Bank Guarantee for fifteen per cent (15%) of the transaction value within fifteen (15) business days of notification from the Bureau of Public Enterprises (BPE).”

 

“The Preferred Bidder’s Bank Guarantee shall be from a Standard & Poor (S&P) or Moody & Fitch ‘A’ rated foreign bank with a correspondent bank in Nigeria or a Nigerian bank rated ‘A’ by a rating agency approved by Securities and Exchange Commission (SEC) and be valid through twenty-one (21) calendar days after the stipulated proposal validity period or any extended proposal validity period.”

 

He said the chosen preferred bidder would be called for discussions with 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 25 per cent 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 receipt of payment, the preferred bidder’s bank guarantee will be returned to the bidder within a maximum of four (4) weeks.”

 

He said to conclude the transaction, the preferred bidder would be handed over the company after the payment is completed.