AMCON anticipates successful divestment from PAN soon

The Asset Management Corporation of Nigeria (AMCON) has revealed that the divestment of its 79.3% stake in Peugeot Automobile of Nigeria (PAN) will happen any moment from now.

AMCON had disclosed that PAN Nigeria had assets totaling N24.96billion ($125.43 million) as of December 2014 and equity of N11.98 billion, and was seeking investors with experience in automobile manufacturing to buy the stake on offer.

The submission of Expression of Interest (EOI) from prospective bidders for the acquisition of PAN Nigeria Limited closed on January 26 this year (2016) and a successful divestment is imminent, according to Jude Nwauzor of the Corporate Communications Department, AMCON.

“We can assure you that we have received interests from both financial and strategic investors. We anticipate a successful divestment from PAN soon,” Nwauzor said in a telephone conversation with BusinessDay.

PAN Nigeria Limited was set up in 1972 as a joint venture between the Nigerian government and France’s Peugeot, and had an annual production of 90,000 cars by the 1980s.

However, PAN’s production capacity slumped by over 300 per cent on annual production of 240 cars today, as obtained from the company’s website.

The company was drowned in crisis shortly after the government sold its stake to private individuals in 2006, as it accumulated bad loans that prompted the stake acquisition by AMCON in 2012.

Governor Nasir El-Rufai of Kaduna State said recently that the government, Bank of Industry, business tycoon Aliko Dangote and some states (Katsina, Kebbi and Jigawa), nurse interest in acquiring the ‘distressed’ company.  “Our hope is that when we acquire the majority share of the company, we will restructure it to operate to a full capacity of assembling between 90,000 and 100,000 cars yearly,” El-Rufai said.

Poor corporate governance was fingered as one of the reasons businesses failed in servicing their loan portfolios, thereby prompting AMCON to step in, Ahmed Kuru, the managing director of AMCON, revealed to BusinessDay in a recent interview.

Kuru asserted that bidders that want to acquire stakes in companies that AMCON warehouses are subject to investigations which seek to ascertain their level of managerial know-how and administrative competence. This, he said, played a vital role in arriving at preferred bidders for stakes.

The PAN stake appears no different. 

“We engaged both financial and legal advisers to appraise the various parties that have expressed interest in PAN. It is included in the terms of engagement of the advisers to conduct thorough checks on the bidders, to know those with the financial, strategic, managerial and technical know-how, to run the establishment as a going concern,”

AMCON said in an e-mailed response.

Analysts have predicted that the profile of Dangote may influence the collective bid by the business tycoon and others, in emerging as the preferred bidders of the PAN stakes, given his shinning track record of effective management and superior business intelligence, which he has demonstrated over time.

Aliko Dangote, Africa’s richest man with a net worth of $17billion, successfully transformed a small trading business, which he began in 1977 to a multibillionaire business that now spans the West-African Sub-region.

His businesses, which are all under Dangote Group of Companies, include foods, sugar, salt, and cement, flour, among others.

LOLADE AKINMURELE