Terminating BPE’s offer on ALSCON illegal, says BFIG

ALSCON Photo: businessnews.com.ng

BPE rescinds sale of ALSCON to BFIGroup.

The conspiracy and intrigues that has frustrated the privatization of Aluminum Smelter Company of Nigeria, ALSCON, since 2004 again reared its head on Tuesday, when the Bureau of Public Enterprise, BPE announced the termination of its offer to BFIGroup to acquire the plant.

BFIG’s Chairman, Rueben Jaja, has dismissed the decision as illegal, null, void and of no effect, describing it as another manifestation of the lawlessness by the privatization agency.

But BPE’s Head, Public Communications, Chigbo Anichebe, said the decision was approved by the National Council on Privatization, NCP, following BFIG’s “inability to pay the agreed 10 per cent of the offer price within 15 working days of the execution of the Share/Sales Purchase Agreement, SPA, as directed by the Supreme Court of Nigeria.”

“The deadline for the execution of the SPA and payment of the 10% of the offer price elapsed at midnight Nigerian time on the 18th day of March 2013, and as at that deadline date, the BFIG had neither executed the SPA, nor made the initial mandatory 10 per cent of the bid amount,” Mr. Anichebe said.

According to the BPE spokesman, in compliance with July 6, 2012 judgment of the Supreme Court awarding ALSCON to BFIG, BPE transmitted an offer letter and the Share Sales/Purchase Agreement (SPA) in respect of ALSCON to BFIG following the January 22, 2013 directive of the NCP presided over by the Vice President, Namadi Sambo.

Reacting, BFIG’s Chairman, Mr. Jaja said apart from violating the July 6, 2012 order, which included a perpetual injunction restraining BPE and its agents from unilaterally terminating the contract, the decision to terminate the offer fell short of the order of specific performance by BPE and other stakeholders pursuant to the reinstatement of BFIG’s as the bonafide owner of ALSCON.

The Supreme Court in its unanimous judgment had stated that “an order of specific performance is hereby decreed mandating the respondent to provide the mutually agreed share purchase agreement for execution by the parties to enable the plaintiff pay the agreed 10% of the accepted bid price of US $410 million (i.e, the sum of US $41 million) within 15 working days from the date of the execution of the Share Purchase Agreement in accordance with agreement dated 20/5/2004 and the 90% balance of bid price shall be paid within 90 calendar days.”

But, contrary to BPE’s allegation that “BFIG, in total disregard of the apex court, drafted and executed an agreement that was different from the one ordered by the Supreme Court”, Mr. Jaja said a 58-page SPA mutually agreed by all stakeholders during the May 20, 2004 pre-bid technical conference issued by BPE on October 8, 2012 was duly signed and returned by BFIG on February 13, 2013.

According to the BFIG President, the executed SPA was accompanied by a covering note asking BPE to sign the appropriate portion(s) of the document and return to BFIG within five working days, accompanied by its bank details for the transfer of the initial payment of 10 per cent purchase price for ALSCON as directed by the Supreme Court.

In the covering note, Mr. Jaja drew BPE’s attention to its January 29, 2013 letter entitled: “Offer to Purchase 77.5% shares of the aluminium shelter company of Nigeria, ALSCON.” He said the letter was in violation of the order of the Supreme Court, as an “offer letter and the invitation to acquire the aluminium shelter”, instead of the aluminium smelter “renders the unilateral share purchase agreement unacceptable.”

He said efforts to get stakeholders to come together to resolve certain issues, including the current valuation of the plant, put at about N14.57 billion or $91 million, as reflected in the December 31, 2011 audited financial accounts of ALSCON, prepared by the accounting firm of KPMG and filed at the Corporate Affairs Commission, CAC, to prepare a mutually agreed SPA have always been difficult, as BPE had consistently turned down requests for a meeting.

Mr Jaja recalled that a scheduled visit by a stakeholders’ technical assessment team constituted by the NCP with the mandate to carry out a comprehensive evaluation of the plant to determine its current condition and operational state pursuant to the apex court’s order, was aborted indefinitely on November 21, 2012.

Besides, he said BPE has neglected to retrieve ALSCON from UC RUSAL, which is still in possession of the share certificate of ALSCON, and the Board of Directors is yet to be dissolved, and a change of ownership of ALSCON filed by the Ministry of Finance Incorporated with the CAC.

Describing BPE’s action as an affront to rule of law, the BFIG President said its lawyers have already filed a motion before the Supreme Court asking for an order directing BPE “to fully enforce” the July 6, 2012 order of the court by signing and executing forthwith the mutually agreed SPA executed and returned to it on February 13, 2013.

The motion filed by Wole Olanipekun & Co. also asked the Supreme Court to compel BPE to take full control and possession of ALSCON and prepare same for handover/transfer to BFIG on the payment of the appropriate bid price.

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