• Monday, July 22, 2024
businessday logo

BusinessDay

Sale of Abuja Disco misses deadline as consortium fails to raise $20m

Fini Standard International Limited and the consortium of investors behind it appear well short of the requirements they must meet by close of business today to acquire the 60percent equity in Abuja Electricity Distribution company, AEDC.

The controlling equity is up for sale at a price of $120 million dollars and Fini Standard and Thomas Etu, the business man who is backing it were given till the end of today to pay $20m to open the door to a bank loan of $100 million which will allow the consortium to take over the Disco.

Etu is Chairman of the Fertilizer Producers and Suppliers Association of Nigeria and he has the enviable job of being major transporter for the phosphate which Nigeria gets from Morocco for its fertilizer scheme aimed at boosting agriculture in the country.

Senior bankers in Lagos told BusinessDay that it was now unlikely that the firm will be able to raise its equity contribution of $20 million.

“We are aware the consortium members are talking to a number of financial institutions but so far there does not seem to have been a breakthrough and given that the deadline is end of Friday, one can assume that this bid will fall through,” one merchant banker told our reporter.

As part of the terms of the sale, it was agreed that “FSL will be required to make an upfront payment of $20,000,000 on or before November 30, 2019 into a dedicated escrow account with the bank failing which the bank reserves the right to contact the reserve bidder.”

Apart from its inability to raise the equity, FSL is also facing the challenge of qualifying for the mandated approval from both the industry regulator NERC and BPE that are insisting that controlling stake transfers can only be made to parties with proven experience and participation in the sector.

The regulator is currently watching the on-going negotiation for the sale of both the Jos and Yola Discos.

 

DIPO OLADEHINDE