BPE: FG to Divest 20% of Its Shares in Privatised Companies on Stock Exchange

Chineme Okafor in Abuja

The federal government will sell up to 20 per cent of its shares in some of the companies it has partially privatised on the Nigerian Stock Exchange (NSE), to allow Nigerians own shares in them, the Director General of Bureau of Public Enterprises (BPE), Mr. Alex Okoh, has disclosed.

Okoh said the government’s share divestment programme would mostly affect privatised firms in the petrochemical sector of Nigeria.

He also stated that privatised firms in the country would have to list in the country’s stock market because public listings were part of the strategic objective of the reform and privatisation programme of the government.

According to a statement Wednesday from the Head of Public Communications in BPE, Mr. Chukwuma Nwokoh, the director general made this disclosure in a paper titled: “Creating an Enabling Environment for Public Listings of the Economy’s Commanding Heights: The Case for Telecommunications and Energy Sectors,” which he presented at the 2017 annual national workshop of the Chartered Institute of Stockbrokers (CIS) in Abuja.

Okoh explained that the BPE was undertaking a quick assessment of the partly privatised enterprises, especially in the petrochemical sector with a view to divesting the government’s shares on the capital market.

According to him, “The BPE is working with core investors in certain privatised enterprises sold by deferred public offering to ensure that they sell at least 20 per cent of such entities to the market via public listing.”

He also stated that the bureau would henceforth ensure that the right core investors with the financial, technical, and managerial competences are selected in future privatisation exercises to ensure that they are capable of moving privatised entities to the desired level and make them attractive for public listings.

Okoh equally stated that the BPE would develop policies to attract additional private sector capital into the privatised companies to eventually provide confidence for the business and encourage their listings.

He noted that the BPE would also ensure that technical partners are retained in the privatised enterprises over the long-term and that there would be continued engagement with the relevant authorities to seek certain waivers where required to make public listings more easily achievable for them.

The statement noted that Okoh called for the establishment of an institutional framework to reach targets in both public and private sectors and to identify quick wins, medium term goals, and long term achievements.

It also quoted a former director general of the bureau, Mr. Benjamin Dikki, to have called on the Securities and Exchange Commission (SEC) and the NSE to set up a committee to persuade the telecommunications companies in the country to go to the capital market.

Commenting further on the proposed listings of privatised enterprises, Okoh informed THISDAY that the companies being targeted would not immediately include the electricity distribution companies (Discos) and generation companies (Gencos), which were hived off from the defunct Power Holding Company of Nigeria (PHCN), and in which the federal government still holds 40 per cent in each of the Discos and in some of the Gencos.

He explained that the electricity operators were underperforming and posting losses, which would not make them attractive propositions for the capital market.

Although he declined to disclose the assets that the BPE was considering for the initial public offers (IPOs), he said the rational behind the listings stemmed from the need to give the Nigerian public a sense of inclusion in the ownership of national assets.

“As you know, several Nigerians have argued in the past the enterprises privatised by BPE were cornered by a few individuals, but as part of the reform and privatisation strategy many of them were supposed to be listed on the stock exchange in the long-run.

“So listing them on the stock exchange will engender a sense of ownership in the assets by more Nigerians,” he said.