PHCN sale: BPE receives $335.85m bidders’ guarantees

28 November 2012, Sweetcrude, Abuja – In line with the payment mechanism for the privatisation of the Power Holding Company of Nigeria, PHCN, successor generation and distribution companies, the Bureau of Public Enterprises, BPE, confirmed it has received bank guarantees of over $335.85million from the preferred bidders for the companies.

In a statement last week, the Bureau said the National Council on Privatisation, NCP, had approved the payment mechanism for the PHCN successor generation companies, Gencos, and successor distribution companies, Discos, at its sixth meeting for 2012, on October 29, at the Presidential Villa, Abuja.

It explained that the process involved the submission by the preferred bidders of additional bid security in the form of a letter of credit or bank guarantee for 15 percent of the transaction value to the BPE.

The preferred bidders were required within 15 business days of notification from the BPE, to submit a “Preferred Bidder’s Bank Guarantee.” The deadline for receipt of the bank guarantee was Friday, November 23.

The preferred bidders for the Discos submitted bank guarantees worth about $188.48million, while the preferred bidders for the Gencos submitted bank guarantees of about $147.38million.

The breakdown of the guarantees are as follows:
Abuja Disco: Kann Consortium Utility Company Ltd – $24,600,000.00; Benin Disco: Vigeo Power Consortium—$19,350,000.00; Eko Disco: West Power and Gas—$20,250,000.00;
Enugu Disco: Interstate Electrics Ltd—$18,900,000.00;
Ibadan Disco: Integrated Energy Distribution and Marketing Ltd—$25,350,000.00; Ikeja Disco: NEDC/KEPCO Consortium—$19,650,000.00; Jos Disco: Aura Energy Ltd—$12,300,000.00; Kano Disco: Sahelian Power Ltd—$20,550,000.00; Port Harcourt Disco: 4Power Consortium—$18,636,306.00; and Yola Disco: Integrated Energy Distribution and Marketing Ltd—$8,890,000.00.

Shiroro Hydro Power Plc: North-South Power Ltd—$16,748,180.00;
Kainji Hydro Power Plc: Mainstream Energy Solutions—$35,680,500; Sapele Power Plc: CMEC/EURAFRIC Energy Ltd—$30,150,000.00; Geregu Power Plc: Amperion Power Distribution Limited—$19,800,000.15; Ughelli Power Plc: Transcorp/Woodrock/Sumbion/Medea/PSL/ Thomassen—$45,000,000.00

It would be recalled that the NCP also approved the next steps for the conclusion of the privatization of the generation and distribution companies. The next stage is that the designated preferred bidder will be invited for negotiations with the BPE.

Within 15 business days after signing of the Sale and Purchase Agreement, SPAs, 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 percent of the share purchase price.

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