The company had led other bidders for the Eko, Ikeja and Ibadan distribution companies, considered to be the biggest and most commercially viable in the country, when the bids were earlier opened on October 16, 2012.
However, the National Council on Privatisation on Monday, in approving the outcome of the financial bid opening for the Power Holding Company of Nigeria’s successor generation and distribution companies, named Integrated Energy as the winner for the Ibadan Electricity Distribution Company with NEDC/KEPCO approved as the reserve bidder.
Significantly, the consortium being backed by the Ekiti, Delta, Edo and Ondo State governments to acquire 60 per cent stake in the Benin Distribution Company, Southern Electricity Distribution Company, was disqualified for submitting two different bids in violation of the rules.
Instead, the company went to Vigeo Power Consortium.
One of the rules guiding the privatisation process states that no company can be allowed to win more than two bids.
In addition, no company will be allowed to win both the Ikeja and Eko Electricity Distribution Companies, which collectively generate about 45 per cent of the total revenue of the Power Holding Company of Nigeria.
Instead of giving the Abuja Electricity Distribution Company to Interstate Electronics Limited, being promoted by business mogul, Mr. Emeka Ofor, which emerged the top bidder by offering Average Technical, Commercial and Collection loss reduction of 21.62 per cent, NCP awarded the company to Kann Consortium Utility Company Limited.
The Eko Distribution Company went to West Power & Gas, which came third behind Integrated Energy and New Electricity Distribution Company Consortium, while Honeywell Energy Resources International Limited, which came fourth in the bid opening round, was approved as the reserve bidder.
For the Enugu Distribution Company, Interstate Electrics Limited was named as the preferred bidder, while Eastern Electric Nigeria Ltd was approved as the reserve bidder.
For the Ikeja Distribution Company, New Electricity Distribution Company/KEPCO emerged as the preferred bidder, while Vigeo Power Consortium was approved as the reserve bidder.
The Jos Distribution Company has Aura Energy Limited as the preferred bidder.
Sahelian Power SPV Limited was named as the preferred bidder for the Kano Distribution Company; 4Power Consortium emerged as the preferred bidder for the Port Harcourt Distribution Company.
For the Yola Distribution Company, Integrated Energy Distribution & Marketing Limited was named as the preferred bidder.
However, the bidders that offered the highest amounts of money for the electricity generation companies were approved as the winners.
With the approval, the highest ranked bidder for each of the companies is required to post an additional bid security (Preferred Bidder’s Bank Guarantee) in the form of a Letter of Credit or bank guarantee for 15 of the transaction values within 15 business days of notification by the Bureau of Public Enterprises.
The approval was given at the sixth meeting of the NCP for the year, presided over by its Chairman, Vice-President Namadi Sambo, at the Presidential Villa, Abuja.
The Chairman, NCP Technical Committee, Mr. Atedo Peterside, briefed State House correspondents at the end of the meeting.
He said the NCP approved Amperion Power Distribution Company Limited with a bid of $132m as the core investor in Geregu Power Plc.
He said the council also approved Mainstream Energy Solutions Limited, which offered an annual fee of $50,760,665.18 and a commencement fee of $257m as the preferred bidder for the concession of the Kainji Hydro Power Plc.
According to Peterside, the NCP also approved North-South Power Limited, which offered an annual fee of $23,602,484.87 and a commencement fee of $111,654,534 as the preferred bidder for the concession of Shiroro Hydro Power Plc.
He said, “The privatisation body also approved that Transcorp/Woodrock/Sumbion/Medea/PSL/Thomassen, with a bid of $300,000,000, is the preferred bidder for the core investor sale of 100 per cent shares of Ughelli Power Plc.
“NCP also approved that Amperion Power Distribution Company Limited, with a bid of $252,000,000, as the reserve bidder for the core investor sale of 100 per cent shares of Ughelli Power Plc.
“NCP approved that CMEC/EURAFRIC Energy JV Consortium, with a bid of $201,000,000, is the preferred bidder for the core investor sale of 100 per cent shares of Sapele Power Plc.
“NCP approved that JBN-NESTOIL Power Services Limited, with a bid of $106,500,000, is the reserve bidder for the core investor sale of 100 per cent shares of Sapele Power Plc.”
Peterside added that given that Amperion was the preferred bidder for Geregu Power Plc, the council also approved that Feniks Electricity Limited would be the reserve bidder for Ughelli Power Plc, subject to its bid being revised to match the reserve price.
He said having cleared the NCP approval hurdle, the highest ranked bidders for the generation and distribution companies would be required to post an additional bid security in the form of a Letter of Credit or bank guarantee for 15 per cent of the transaction values within 15 business days of notification from the BPE.
Peterside said the preferred bidders’ bank guarantee should be from a Standard & Poor’s or Moody & Fitch “A” rated foreign bank with a correspondent bank in the country or a Nigerian bank rated “A” by a rating agency approved by the Securities and Exchange Commission, and be valid for 21 days after the stipulated proposal validity period or any extended proposal validity period.
He explained that the designated preferred bidders would be invited for negotiations with the BPE.
He said, “Within 15 business days after signing of the Sale and Purchase Agreement, 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 per cent of the share purchase price.
“Within six months after signing of the Sale and Purchase Agreement or the Shareholders’ Agreement, whichever is earlier or mutually agreed upon time, the bidder will be required to pay the outstanding 75 per cent of the share purchase price to complete the transaction.
“Upon receipt of payment, the preferred bidder’s bank guarantee will be returned to the bidder within a maximum of four weeks.
“After the completion of payment, the handover of the successor company to the preferred bidder will conclude the transaction.”
On the opposition of some state governors to the choice of the preferred bidder for Benin distribution company, Peterside said nobody had been able to make a specific allegation of wrongdoing against the NCP, adding that the exercise was transparent.
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