Monday, April 21, 2014

BFIG commences process to take over ALSCON

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Photo: businessnews.com.ng

Controversy exists over the implementation of a ruling by Nigeria’s Supreme Court.

BFIGroup Corporation, the Nigerian-American consortium that was recently reinstated by the Supreme Court as the preferred bidder for the Aluminium Smelter Company of Nigeria, ALSCON, Ikot Abasi, Akwa Ibom State, on Thursday said it has commenced the process to formally take over the plant.

President of BFIG, Reuben Jaja, said in Abuja that a signed copy of the mutually agreed share purchase agreement, SPA, provided by the Bureau of Public Enterprises, BPE, on October 8, 2012, which was amended with additional information presented on October 18, 2012, was executed and transmitted to the privatization agency on Wednesday.

Mr. Jaja, who said copies of the executed SPA were dispatched to all the relevant agencies involved in the transaction, including the National Council for Privatisation, NCP, noted that the action was in response to the January 29, 2013 letter by the acting Director General of BPE, Benjamin Dikki. The letter conveyed the NCP’s directive to forward the document for execution in line with the July 6, 2012 order of the Supreme Court on the disputed acquisition of ALSCON.

BFIG was declared the preferred bidder for ALSCON by the NCP with a $410 million bid offer at the end of the June 14, 2004 financial bid exercise. However, BPE was to later on July 9, 2004 nullify the bid in controversial circumstances. The decision to open negotiations with UC RUSAL on the takeover of the plant after it was disqualified previously for violating stipulated bid guidelines triggered a legal battle by BFIG against BPE.

But, in executing the SPA, Mr. Jaja said BFIGroup expects the BPE to sign its portion of the agreement and return same within five working days of its receipt as well as provide it’s (BPE’s) appropriate banking details to enable the company issue appropriate instructions to its bankers for the transfer of the initial payment of 10 per cent purchase price stipulated in the SPA.

In the covering note to the signed SPA, BFIG drew BPE’s attention to some fundamental flaws in its January 29, 2013 letter, which it pointed out rendered the “unilateral share purchase agreement unacceptable.”

According to Mr. Jaja, BFIG had written to BPE on February 1, 2013 shortly after receiving its letter, entitled: “Offer to Purchase 77.5% Shares In Aluminium Shelter Company of Nigeria (ALSCON)”. The letter was to draw the BPE’s attention to the fact that the latter’s letter was in clear violation of the order and decree of the Supreme Court.

“The issuance of an ‘offer letter and the invitation to acquire the aluminium shelter’, instead of the aluminium smelter, renders the unilateral share purchase agreement unacceptable,” Mr. Jaja said, adding that offering the shares of ALSCON to BFIG after a binding contract was “affirmed, ordered and decreed by the Supreme Court to have taken effect on June 14, 2004” was a breach of the rule of law, capable of embarrassing the government.

“BFIG never submitted any bid to buy any aluminium shelter anywhere. BFIG is not interested in buying any aluminum shelter. What BFIG was declared the preferred bidder for in 2004 was Aluminium Smelter Company of Nigeria, ALSCON. We are determined to proceed to bring the process to a conclusion,” Mr. Jaja said.

Besides, the BFIG President faulted the SPA sent for execution, describing the agreement dated 20/5/2004 as “fictitious, mischievous and non-existent.”

“I wish to say that there has never been any share purchase agreement dated May 20, 2004. There could not have been one, because no serious investor would have accepted an agreement that BPE said was in existence several weeks before the actual financial bid exercise held on June 14, 2004, on the basis of which BFIG emerged the preferred bidder for ALSCON with an offer of $410million.

“Perhaps, what BPE is mischievously referring to as SPA were irrevocable resolutions contained in Memorandum of Understanding, MoU, signed by about 21 stakeholders that attended the May 20, 2004 pre-bid technical conference, to affirm commitments towards the June 14, 2004 financial bid exercise.”

When PREMIUM TIMES called BPE shortly after the letter was issued to inquire about these flaws, its spokesman, Chukwuma Nwoko, refused to answer the questions, claiming it was issued by competent legal experts.

“Are you a lawyer?”, Mr. Chukwuma told the reporter on phone. “Look, that thing (letter and SPA) was drafted by lawyers. I am not a lawyer. If you are, I am not, and I am not going to entertain any questions on it. Are you working for BFIG?”, he said angrily before terminating the call.

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