PHCN: Three companies beat payment deadline

Geometric-power21 August 2013, Abuja – West Power and Gas, Integrated Energy Distribution and Marketing Company and Amperion Power Company Limited  Tuesday beat the deadline given to bidders to pay the outstanding 75 per cent for the distribution and generation companies being sold to investors through the privatisation process.

Sources in the Bureau of Public Enterprises, BPE, informed that West Power and Gas, which won the bids for Eko Distribution Company (Disco) Plc, paid $101.25 million to the account of the privatisation agency, being full and final payment for the acquisition of the power utility.

West Power and Gas is a consortium promoted by the trio of Dr. Tunji Olowolafe, a major contractor in Lagos; Charles Momoh, a businessman; and Ernest Orji, who as managing director of Southern Sun Hotel, Ikoyi, Lagos (formerly Ikoyi Hotel/Nigerian Hotels Limited), is a veteran of the privatisation process.

Six months ago, West Power and Gas had initially paid $33.75 million, representing the 25 per cent down payment for Eko Disco.

Following on the heels of West Power and Gas was Integrated Energy, which was said to have paid $160 million for the acquisition of Ibadan and Yola Discos, while Amperion made a part payment of $45.16 million (N7 billion) for the 414MW Geregu I thermal power station.

Amperion, which is promoted by frontline entrepreneur and chairman of Forte Oil Plc, Femi Otedola, actually instructed its lenders to transfer the initial deposit on Monday and promised BPE to transfer the balance of $58.06 million (N9 billion) yesterday. As at press time, it could not be verified if Amperion had paid the balance.

THISDAY also learnt that Integrated Energy, which is chaired by former military Head of State, General Abdulsalami Abubakar, and fronted by the trio of the Skye Bank chairman, Tunde Ayeni, Captain Osa Okunbor and Dr. Sola Ayandele, raised a total of $270 million from lenders.

Of the $270 million, $160 million was used for acquisition of the assets, while $110 million was set aside as OPEX (operating expenditure) and CAPEX (capital expenditure) to run Ibadan and Yola Discos.

Integrated Energy’s transaction, it was further learnt, was funded by a consortium of five banks led by Skye Bank Plc.

Other banks in the lending consortium are United Bank for Africa Plc, Heritage Bank Limited, First City Monument Bank Plc and Diamond Bank Plc.

For the acquisition, Integrated Energy was said to have put down $69 million as equity, while $160 million was raised from the banks as debt.

Integrated Energy had initially paid about $57 million in the ratios of $42.25 million (about N6.63 billion) and $14.75 million (about N2.316 billion) for Ibadan and Yola distribution companies respectively, representing the 25 per cent down payment for the assets.

When added, it means the firm has coughed up as much as $217 million to take over 60 per cent in both distribution companies.

With the payments made by West Power and Gas, Integrated Energy and Amperion, they effectively set the ball rolling for other bidders to follow suit.

It also confirmed a report Monday that bidders had set the ball rolling to meet the August 21 deadline set by the National Council on Privatisation (NCP) to pay outstanding 75 per of the offer price for the Gencos and Discos.

Last week, some of the bidders had started to drag their feet in the hope that the payment deadline would be extended by NCP.

They had expressed concern that the federal government had not been able to meet the conditions precedent that would give their lenders comfort to finance the acquisitions.

However, the NCP and BPE dashed their hopes Monday when they both insisted that the August 21 remained sacrosanct as stipulated in the Request for Proposals, RFPs.

– Chineme Okafor, This Day

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