NCP approves handover of PHCN successor companies

The National Council on Privatization (NCP), on Friday, formally approved the handover of the successor companies unbundled from Power Holding Company of Nigeria, PHCN, to the preferred bidders. 

The decision, which was taken at the Council’s sixth meeting in Abuja, followed the approval of the payment of the remaining 75% of 14 out of the 15 bidders for the acquisition of the 15 PHCN successor companies. Among the payments approved by the Council include the 12 companies that made payments on the due date:

·    Amperion Power Co. Ltd (Geregu)

·    Transcorp/Woodrock (Ughelli)

·    Integrated Energy Company (Ibadan)

·    NEDC/KEPCO (Ikeja)

·    Vigeo Power Ltd. (Benin)

·    Aura Energy Ltd. (Jos)

·    Integrated Energy Company (Yola)

·    Mainstream Energy Ltd. (Kainji)

·    West Power & Gas (Eko)

·    Kann Consortium (Abuja)

·    4Power Consortium (Port Harcourt), and,

·    Sahelian Power SPV Ltd. (Kano).

The Council also approved the late payments by North South Power and Interstate Electric Limited, for Shiroro Power Plc and Enugu Distribution Company Plc respectively. But the approvals were subject to the late payment penalty as provided in clause 12.20 on interest for late payment and clauses 5.5, 5.5.1 and 5.5.2 of the Share, Purchase Agreement, SPA.

Legal interpretation

However, the Council referred the case of CMEC/EURAFIC consortium, the preferred bidder for Sapele Generation Company to the Office of the Attorney General of the Federation and Minister of Justice and Legal Committee of the NCP for advice. The move became imperative in order to resolve the identified legal issues, as the group had paid over 50% of their bid cost or $119,887,156 of the $201,000,000. The NCP also directed the Office of the Accountant General of the Federation to ensure that all staff entitlements are fully paid by the week beginning September 23, and ending September 27, 2013. Council equally approved the protocol for the physical handover of the successor companies to the bidders that have fully paid the remaining 75% for the acquisition cost.

It would be recalled that in December 2010, NCP advertised for Expressions of Interest (EOIs) from prospective core investors interested in acquiring controlling stake in the 11 successor distribution companies (Discos) and the six generation companies (Gencos) created out of the Power Holding Company of Nigeria. All the prequalified bidders were given access to the virtual data room from September 1, 2011 to the proposal submission date of July 31, 2012. Pre-qualified bidders were also allowed to visit the distribution companies and physical data rooms that were located within the franchise area of each company. Recall that at the deadline for payment of the initial 25% of bid consideration on 21 March 2013; all the preferred bidders for the 15 Power Holding Company of Nigeria (PHCN) successor companies met the deadline. At that deadline, the BPE had received $559,445,573.96 from 14 bidders for 15 successor companies. The Nigerian electricity industry has been unbundled into generation, distribution and transmission companies with a view to encouraging private sector participation and attracting foreign and local investment into the Nigerian power sector to ensure economic and reliable electricity supply.

Source: (Vanguard)