BPE Explains Sale of FG’s 21% Shares in ‘Mint’ to CBN

By Ndubuisi Francis in Abuja

The Bureau of Public Enterprises (BPE) has explained that the sale of 21 per cent shares of the federal government in the Nigerian Security Printing and Minting (NSPM) Plc, otherwise known as ‘Mint’ to the Central Bank of Nigeria (CBN) was in furtherance to Section 1 (3) of the Public Enterprises (Privatisation and Commercialisation) Act.

The CBN and the BPE had on Tuesday signed an instrument for the sale of 12.69 billion shares, representing 21 per cent of federal government’s interest in the NSPM to the CBN.

The BPE, in a statement issued by its Head, Public Communications, Amina Tukur Othman, recalled that the earlier effort to privatise the Mint between 2002 and 2004; pursuant to Section 1 (3) of the Public Enterprises (Privatisation and Commercialisation) Act were unsuccessful necessitating the National Council on Privatisation (NCP) to formulate a different transaction strategy and approved the strategic investment by the CBN in the company.

“The purpose of the strategic investment was for CBN to manage, restructure and restore the company to profitability within a period not exceeding five years, following which it would be privatised by the Bureau,” the privatisation agency said.

Quoting the BPE Director General, Mr. Alex Okoh, the statement noted that the sale of 21 per cent shares of the federal government in the NSPM Plc to the CBN will contribute over N17 billion to the national treasury.

It added that Okoh had also stated at the signing ceremony for the sale of the federal government’s 12.4 billion shares that the conclusion of the transaction represented another success in the implementation of the federal government’s privatisation and commercialisation programme.

Okoh maintained that the federal government was handing over to the CBN a company with tremendous potential to achieve significant growth.

This, he said, could be attested to by the following:
*The global market for security printing was estimated to be worth $27.2 billion in 2017 and is estimated to grow at about 4.8% annually to $34.3 billion by 2022;

*Africa is a fast growing market for security printing. The industry is projected to grow at an average annual rate of 9.6 per cent over the next five years. This growth is fuelled by high population growth and increased mobility across the region as well as increased spending on identity programmes. The global market for passports and ID cards is valued at around $3.7 billion and is growing at 6 per cent per annum; and

*In the area of its core operation which is currency printing, the total amount of cash in circulation is growing at 4 per cent per annum globally and is expected to increase at a similar rate in future.

He recalled that the earlier effort to privatise the Mint between 2002 and 2004; pursuant to section 1 (3) of the Public Enterprises (Privatisation and Commercialisation) Act were unsuccessful, necessitating the National Council on Privatisation (NCP) to formulate a different transaction strategy and approved the strategic investment by the CBN in the company.

“The purpose of the strategic investment was for CBN to manage, restructure and restore the company to profitability within a period not exceeding five years, following which it would be privatised by the Bureau.

“In compliance with NCP’s directive, the Bureau warehoused 12.69 billion shares of the federal government’s holding in the Mint with the CBN at a par value of 0.50k per share amounting to N6,344,900,000.

“It was further agreed that this consideration would be refunded to the CBN from the proceeds of sale realised from the eventual privatisation of the company,” he said.

He said the CBN’s strategic investment in the company was a success, achieving its objective of turning around the fortunes of the company and returning it to profitability.

Following the expiration of the strategic investment period, Okoh added: “The CBN indicated its strong intention to acquire the company on an arm’s length basis, noting the sensitive and strategic nature of the security printing and minting services rendered by the company which include immigration and electoral materials.”

According to him, after a careful consideration of the pertinent issues, the Bureau submitted a proposal to the National Council on Privatisation (NCP) to formalise the sale of 21 per cent of the federal government’s interest in the company to the CBN while the government would retain an equity holding of 10.1 per cent.

This proposal was duly approved by the council, paving the way for the Tuesday sale of 21 per cent stake to the CBN.

Efforts to sell the federal government’s shares in the Mint date back to 2002 when the BPE received expressions of interest (EOIs) from three prospective core investors desirous of acquiring controlling shares in it.

The firms included De La Rue of England, which currently holds 25 per cent equity share in the Mint, Real Caya de la Mondela, a Spanish firm, and G & D of Germany (Giesecke & Devrienc).

The 2002 move to sell the shares were unsuccessful.