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AMCON MD explains ‘delay’ in divestment of Peugeot Nigeria

August 28
20:15 2018

Ahmed Kuru, managing director of the Asset Management Corporation of Nigeria (AMCON), has explained the why the divestment of Peugeot  Automobile Nigeria (PAN) has been delayed.

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He said the delay is caused by a decision of Automobile Peugeot France, it’s main partner,  to seek partnership with another entity different from the one approved by the federal government.

Kuru made the assertion in an interview published in the August edition of Financial Nigeria, a development and finance publication.

According to the AMCON boss, although the debt recovery organisation had recommended a “preferred bidder” that was approved by the government, the French car manufacturer decided to pull out of the deal with its Nigerian counterpart and instead align with a new partner.

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“We started the process of divestment about two years ago. We even identified the preferred bidder, which we recommended to the authorities. It was approved but there was this need for us to renegotiate with the company on the pricing. But during the process, the main partner of PAN, which is Automobile Peugeot of France, gave us a notice that it wants to align with another partner in Nigeria,” he said.

“This development has affected the valuation of PAN. If the parent company says it is pulling out, it reduces the value of the business, given that PAN deals in only one product, which is Peugeot.

“But this throws up a different debate that we must have. And I think the Ministry of Trade and Investment and other regulatory agencies need to look into this. AP France can’t operate in Nigeria for over 40 years, out of which it was directly managing PAN for 30+ years, and then when PAN got into a dire financial situation, the French car manufacturer now decides to walk out and seek partnership with another entity.

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“What happens to the assets of PAN? This should not be allowed. After over 40 years, AP France now wants to leave PAN with a liability of over N20 billion. You can’t do that anywhere, not even in France. I will be disappointed if the regulators approve the proposed partnership between AP France and the new party. PAN belongs to the government. If it is allowed to go under, it is the government that would lose money.”

Aliko Dangote, Africa’s richest man, in alliance with Kaduna and Kebbi states and the Bank of Industry (BOI) had in 2016 made a bid to acquire a majority stake in PAN.

Eric Maydiey, the representative of Automobile Peugeot France in Nigeria had however alleged  the joint venture, known as Dangote Peugeot Automobile Nigeria (DPAN), decided to opt out of the deal because over a year after bidding for the company with 52 million Euros (over N21b), AMCON is yet to declare it as the winner of the bid.

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