All the preferred bidders for the 15 Power Holding Company of Nigeria (PHCN) successor companies have met the deadline for the payment of the mandatory 25 percent of the offer value of their bids.
As at yesterday’s, (March 21, 2013) deadline, the Bureau of Public Enterprises (BPE) had received $559,445,573.96 from all 14 bidders for the 15 successor companies, thus setting the stage for the next line of challenges which include government meeting its obligations to facilitate easy access to gas supply, resolve labour issues, and undertake due diligence on the acquired companies, as well as fund the 75% balance.
The list of investors that paid include 4Power Consortium – $31million for Port-Harcourt Distribution Company; Interstate Electrics Limited – $31.5 million for Enugu Distribution Company; West Power & Gas – $33.75 million for Eko Distribution Company; Vigeo Consortium – $32.25million for Benin Distribution Company; and Sahelian Power SPV – $34.25million for Kano Distribution Company.
Others include NEDC/KEPCO – $32.75 million for Ikeja Distribution Company; Kann Consortium -$41 million for Abuja Distribution Company; Aura Energy – $20,47million for Jos Distribution Company; Integrated Energy Distribution & Marketing Company – $42.25 million for Ibadan distribution company and $14.75 million for Yola Distribution Company;
The investors for the generating companies are Amperion Power Company Limited – USD$33 million for Geregu Power Plc; Mainstream Energy Ltd – $59,47 million for Kainji Power Plc; CMEC/EUAFRIC Energy JV – $50.25 million for
Sapele Power Plc; North-South Power Company – $27.9 million for Shiroro Power Plc.; and Transcorp/Woodrock Consortium – $75 million for Ughelli Power Plc.
By these payments, the investors will become part of the shadow management of the companies, which will enable them do thorough due diligence on the acquisitions and move to pay the
75% balance through equity contributions from partners, and or financing from the banks.
BusinessDay sources say raising funds for the balance payment will not be a major challenge, since they have demonstrated enough capacity by the 25% equity payment, and that the banks will be favourably disposed to lend.
The tough challenges however may come from government and policy issues as well as labour unions who will be wont to making demands from the new investors.
Recall that the final approval of the preferred bidders by the National Council on Privatisation (NCP) and its announcement for the successor companies was done on October 23, 2012.
The Nigerian electricity industry has been unbundled into generation and distribution companies and a single transmission company, with a view to encouraging private sector participation and attracting foreign and local investment into the power sector for economic and reliable electricity supply.
STEVE OMANUFEME & OLUSOLA BELLO