“Any buyer who attempts to purchase this property (ALSCON) would be doing so at its peril.”
A recent announcement at the Hong Kong Stock Exchange, HKEx, by UC RUSAL, may have blown the lead on its plot to sell off the Aluminium Smelter Company of Nigeria, ALSCON, even when the dispute over the ownership of the plant is still pending before the Supreme Court.
The notice to the HKEx was reported on April 8, 2014 by UC RUSAL, which said that its New Jersey subsidiary, RTI Limited, had already hired the services of Renaissance Securities to provide “financial advisory” on a potential sale of shares of the company’s subsidiaries in West Africa.
Apart from Guinea Republic, where UC RUSAL was forced to shut-down operations two years ago, the only other place the company appears to exist is Nigeria, where its bid for ALSCON in 2004 had since been nullified by the Supreme Court.
The services of Renaissance Securities, said to cost “up to about $10 million”, include a fixed success fee of $3 million and an incentive fee of up to $7 million for the entire term of the Mandate Letter, including any extended period of the term, Moscow-based Energy specialist, John Helmer, quoted Bloomberg News as saying.
Details of the notice showed that the $10 million may be disbursed in installments, including a down payment of $500,000, based on a percentage of either 2 per cent or 3.5 per cent of the transaction value in respect of the sale of shares, depending on the actual size of the relevant transaction.
UC RUSAL is said to have given Renaissance Securities $200 million as its asking price, with $350 million as its wishful price, though current valuation of the asset of ALSCON is grossly below that price.
Prior to the controversial handing over of the plant to UC RUSAL by the Bureau of Public Enterprises, BPE in 2006, the financial statement by the auditing firm of PriceWaterCoopers showed that ALSCON’s asset value was about $1.1billion (about N138 billion).
Another audit report by KPMG showed that under UC RUSAL the value of the company’s asset declined significantly to less than $89 million (about N14.5 billion) in 2011.
Equally, the company’s workforce declined steadily from about 784 employees in 2004 to less than 174 as at March 17, 2014 following the recent sack exercise, the third in five years; while the management of the company has since been transferred by the Russians to an interim team led by an acting Managing Director, Ime Inyang.
None of the Russians in the top management staff of the company is currently in Nigeria, PREMIUM TIMES learnt.
Normal production activities have since shutdown indefinitely, with UC RUSAL pressing for approval to hook up the turbines from the plant to the national grid to sell electricity, while also disposing components of the plant they regard as “scraps” to raise money to pay the workers.
The planned sale would appear to follow an established pattern of defiance of the authority of Nigerian Supreme Court, which handed an order of specific performance on July 6, 2012 nullifying UC RUSAL’s continued control of ALSCON as the owner-manager of the plant.
The Supreme Court in its ruling had directed the National Council on Privatization, NCP and the BPE to take immediate steps to reverse the controversial declaration of UC RUSAL as owners of ALSCON and transfer the company to BFIGroup, which was declared the winner of the 2004 bid.
PREMIUM TIMES learnt that the UC RUSAL management omitted in its filing with the Hong Kong Stock Exchange the ruling of the Supreme Court about its status in the ALSCON transaction.
UC RUSAL did not also disclose that a $2.8 billion suit against it by BFIGroup, for its unlawful interference in its contract with BPE to take-over ALSCON, is scheduled to commence by April ending.
BFIG’s legal counsel in the United States, Jimmie Williams, in an email to PREMIUM TIMES dismissed any attempt to sell ALSCON as illegal, warning buyers that they risk the legal sanctions of the Nigerian court through any attempt at take-over of the plant.
On the Hong Kong Stock market notice, Mr. Williams described it as another demonstration of UC RUSAL’s disrespect and mockery of the rule of law.
“BFIGroup is and remains the rightful owner of ALSCON,” he said. “Any buyer who attempts to purchase this property would be doing so at its peril. We will continue with all legal efforts to enforce our rights, and as we have demonstrated, will take action against any entity which interferes with those rights.”
On April 30, 2014, the Federal High Court in Abuja is scheduled to rule on BFIG’s motion to enforce the July 6, 2012 order of the Supreme Court order stripping UC RUSAL of any rights over ALSCON.
A call by our reporter to UC RUSAL spokesperson, Tatyana Smirnova, did not go through. An email to her seeking confirmation of the report was also not responded to. The company’s spokesperson in Moscow told Bloomberg News he could not confirm the information.
However, at a recent media briefing, Director General, BPE, Benjamin Dikki, said government was re-negotiating the Share Purchase Agreement, SPA with UC RUSAL on how to hand over ALSCON to the Russians, regardless of the Supreme Court order reinstating BFIGroup as the bid winner for the plant.
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