19 Firms Submit Bids to Acquire Afam, Yola Discos

Ndubuisi Francis in Abuja

No fewer than 19 firms have indicated interest to acquire the Afam Power Company and the Yola Distribution Company (YDC) already put up for sale by the federal government.

While seven companies submitted bids to buy Afam, 12 others submitted for the acquisition of the Yola Disco, at the close of the submission of bids for the Expression of Interest (EoIs) for the two power companies.

The Head, Public Commu-nications of the Bureau of Public- Enterprises (BPE), Amina Othman Tukur, in a statement shortly after the 1 p.m. deadline for the submission of EoIs for the two companies on September 26, 2018, said the bidding companies were renowned players in the power industry.

Tukur said the evaluation committee earlier set up by the BPE to scrutinise the bids was immediately after the expiration of the deadline, inaugurated by the Bureau’s Director of Energy, Mr.Yunana Jackdell Malo to commence work.

The request for expression of interest in the two companies was published by the BPE in national newspapers on August 16, 2018.

Although Yola Distribution Company was successfully privatised and handed over to the core investor in 2013, a force majeure was declared in 2015 by the core investor citing insecurity in the North-east region of the country.

Following this, the company was duly repossessed by the federal government.

Integrated Energy and Distribution Marketing Company (IEDM), a firm fronted by Mr. Tunde Ayeni, Capt. Osa Okunbor, and a former military head of state, Gen. Abudulsalami Abubakar, had acquired the Yola and Ibadan Discos for $228 million in 2013 under the privatisation programme.

A year later, Integrated Energy was forced to declare force majeure and returned Yola Disco to the federal government on the grounds that it was impossible to operate and access the assets of the electricity distribution firm in the North-east due to the Boko Haram insurgency.

After a joint evaluation of the electricity asset, as provided under the terms of the share purchase agreement, the Bureau of Public Enterprises (BPE) and Ministry of Power, in the twilight of the Goodluck Jonathan administration, had approved $186 million as the sum to be refunded to Integrated Energy.

But the payment of the sum was stalled over concerns that the $186 million was too high, forcing the parties to the transaction to renegotiate the compensation to be paid to Integrated Energy.

The non-payment of the refund to Integrated Energy has been linked to some of the non-performing loans (NPLs) on the books of Skye Bank Plc, as the promoters of Integrated Energy had borrowed from the bank to acquire and inject capital into Yola and Ibadan Discos.

The federal government later renegotiated and reached an agreement with Integrated Energy on a payout of $87.8 million as against the $186 million earlier approved as compensation to the company after it returned the Disco to the federal government.

However, their inability to service the loan for Yola Disco was one of the factors that led to the erosion of Skye Bank’s capital adequacy and liquidity ratios and ultimately takeover of the bank by the Central Bank of Nigeria (CBN) penultimate week.

The transaction for Afam Power Generation Company on the other hand fell through due to the delay in signing the Gas Supply Agreement (GSAA) and the Gas Transportation Agreement (GTA). In 2017 the National council on Privatisation (NCP) gave approval for a fresh transaction to privatise the two power companies.