TheCable

The Bureau of Public Enterprises (BPE) said the federal government has approved the extension of payment deadline by preferred bidders of Afam Power Plc and Kaduna Electricity Distribution Company by 60 days.

This is contained in a statement made available to newsmen in Abuja on Tuesday by the head of public communications of BPE, Mr Chigbo Anichebe.

According to the statement, the federal government decided to extend the date of payment for the balance of 75 per cent of purchase prices of both companies by an additional 60 days, from August 6 to October 6, 2014.

It stated that the decision to extend, rather than cancel the sale of the firms, was because the government did not meet some of the agreements made during the transaction.

“Televeras Group, the preferred bidder for Afam, pleaded the non-execution of the gas agreements required to bring the transaction to a financial conclusion and security challenges as reasons for seeking the extension.

“They noted that the bankability of the transaction is predicated on the execution of the gas agreement.

“Also, that the non-execution of the agreement has made it difficult to satisfy the due diligence enquiry required for the raising of funds for the financing of its pre and post acquisition plans,” the statement said.

It stated that Northwest Power Limited, the preferred bidder for Kaduna Disco, had on July 25, 2014, requested an extension due to the recent security challenges experienced within the state.

“Kaduna Disco said it could not afford making the payment because its offshore financiers postponed the disbursement of funds already obtained, due to the recent security challenges experienced in Kaduna State.

“The company explained that though it had secured financing from a foreign bank, the bank had requested for additional time to review the transaction in the aftermath of the security challenges in Kaduna,” BPE stated

Televeras Group emerged the preferred bidder for Afam Power Plc with a bid of 260.5 million U.S dollars, in a bid session held by BPE in 2013.

Northwest Power, winner of Kaduna Disco bid, had the highest “aggregate technical commercial and collection loss reduction” figure of 29.26 per cent compared with the profile of other bidders.