The federal government may yet again grant Taleveras Group and Northwest Power Plc, the preferred bidders for Afam Power Plc and Kaduna Electricity Distribution Company, extension of date for payment of 75 percent balance of purchase price for the power assets.
Taleveras had paid $65,012,500 for Afam and Northwest $40,750,000 for Kaduna Disco being the initial deposit of 25 percent of the bid price for the power companies following which the Share Purchase Agreements (SPA) were executed by them and the BPE.
They were required to pay the outstanding balance of 75 percent of the bid price August 6, 2014 but they couldn’t meet up, writing to the government seeking for extension.
Taleveras and Northwest pleaded the non-execution of the gas agreements required to bring the transaction to a financial conclusion and security challenges as reasons for seeking the extension.
Upon their request, the federal government granted them an additional 60 days, from August 6, 2014 to October 6, 2014 to effect payment of 75 percent purchase price for the assets.
The 60-day extension period expired yesterday and findings revealed both companies had not paid the balance on or before the October 6 deadline to do so.
Citing reasons why the transaction could not be completed, the Director General of Bureau of Public Enterprises (BPE) said the Sallah holidays (Otober 6-7) declared by government impacted on the transaction process.
Also, the non-execution of the gas supply agreements which the bidders for Afam previously raised as a major constraint to the payment had still not been signed, the DG said.
Speaking to reporters in Abuja, when asked for update on the payment for the assets, the DG said: “They are due this month like you are aware. We also have to take cognisance of the fact that three days of holidays have intervened, when you cannot do any banking business in Nigeria.
So, we will also look at some other circumstances like for Afam, we are still not been able to sign the gas agreement with Shell Petroleum Development Company and once you cannot sign a gas agreement, you cannot conclude the sale. We are trying to see what will happen before the expiration date and then we will advise the National Council on Privatisation (NCP); we will know what further action we will take on that,” the DG said.
Asked if there was possibility of shifting the deadline, he said, “I don’t want to speculate.”
Kaduna Electricity Distribution Company (Kaduna Disco) and Afam Power Generating Company (Afam Genco) are the remaining out of 17 companies that emerged from the unbundling of the Power Holding Company of Nigeria (PHCN).
Again, FG may set new payment date for Afam, Kaduna Disco
