19 August 2014, Abuja – The Federal Government has extended the deadline for the payment of the balance of 75 per cent of purchase price by the preferred bidders for Afam Power Plc and Kaduna Electricity Distribution Company by additional 60 days.
It announced the extension on Tuesday through the Bureau of Public Enterprises.
It stated that it had granted the request for deadline extension made by Televeras Group and Northwest Power Plc, the preferred bidders for Afam and Kaduna power plants respectively, from August 6, 2014 to October 6, 2014.
Televeras had paid the initial deposit of 25 per cent of the bid price of $65,012,500 for the Afam power plant and Northwest Power Plc paid $40,750,000 for the Kaduna Disco following which the Share Purchase Agreement were executed by the two parties.
They were required to pay the outstanding balance of 75 per cent of the bid price within six months of the execution of the SPA on August 6, 2014.
A statement issued by the Head, Public Communications, Mr. Chigbo Anichebe, said Televeras Group had pleaded that the non-execution of the gas agreements required to bring the transaction to a financial conclusion and security challenges were reasons for seeking the extension.
Televeras Group, which is the preferred bidder for Afam Power Limited had on May 19, 2014 requested from the Federal Government an extension of time to pay the balance of the 75 per cent bid price for the firm.
It had stated that gas agreement that was germane to the completion under the Share Purchase Agreement it signed with the Federal Government had not been executed.
“Televeras noted that the bankability of the transaction was predicated on the execution of the gas agreement and that the non-execution of the agreement had made it difficult to satisfy the due diligence enquiry required for the raising of funds for the financing of its pre and post acquisition plans,” the BPE said.
For Northwest Power Limited, the preferred bidder for the Kaduna Disco, the bureau said the firm had on July 25, 2014, requested an extension of transaction timeline by 60 days due to the recent security challenges experienced within the power plant.
This, according to Northwest Power, made its offshore financiers to postpone disbursement of bank facilities already obtained.
The company explained that though it had secured financing for the transaction from a foreign bank, the financial institution had requested for additional time to review the transaction in the aftermath of the security challenges in Kaduna to ensure the adequate safety of its funds.
– The Punch