Posted by By Omoh Gabriel, Business Editor on
THE Federal Government has set in motion a machinery that would enable host communities and labour acquire five per cent stake each in the Port Harcourt refinery. Indication to this effect emerged weekend in Abuja. Presidency sources said the proposal awaited government consideration and approval.
LAGOS - THE Federal Government has set in motion a machinery that would enable host communities and labour acquire five per cent stake each in the Port Harcourt refinery. Indication to this effect emerged weekend in Abuja. Presidency sources said the proposal awaited government consideration and approval. This has re-enforced the disclosure made by the Director-General, Bureau of Public Enterprises (BPE), Mrs Irene Chigbue, while interacting with newsmen in Abuja on Thursday.
Mrs Chigbue said: "At the last meeting with labour and host communities, the stakeholders were asked to come up with proposals on modalities for the take up of the five per cent equity in PHRC being proposed - each for labour and host communities.
"An enlarged stakeholders forum is being planned for Port Harcourt. The forum is to further enhance the buy-in of the stakeholders to the privatisation efforts in the oil and gas sector," she said.
Giving an insight into the privatisation programme of the Port Harcourt refinery and others in the oil and gas sector, Mrs Chigbue said: "Appreciable progress has been made since the recommencement of work by the Advisers in January 2005; and the status update on this transaction is as follows:
"A detailed environmental assessment has been completed. The Advisers have put together recommendations on remediation plans; Legal and Financial/Accounting, Due Diligence is on-going to facilitate corporation of the company and introduction of commercial operations; PHRC would be established as a separate business entity from NNPC to establish its commercial viability and provide a business model for investors; Draft PIM (Preliminary Information Memorandum) has been distributed to the initially pre-qualified bidders including the oil majors."
She said the PIM had also been issued to the firms short-listed in the 2005 oil blocks bidding rounds to keep them abreast of the opportunity for investing in the downstream sector. She added that Electronic Data Room had also been set up on-line and access granted to prospective bidders after signing confidentiality agreements while site visits to the refinery were also conducted by prospective investors with a view to making a quick assessment of the plant and provide a basis for investment decision.
According to the BPE programme, stakeholders buy-in efforts are on-going with sustained monthly meetings with labour and host communities to address their concerns in the privatisation exercise. Chigbue said an Interim Technical Board (ITB) had been working towards achieving its mandate of steering the company towards its privatisation and that key issues being considered by the ITB included minimal plant rehabilitation and performance, optimum staffing, and introduction of commercial operations.
She said a Bidders Forum was held on June 27, 2005 at the Credit Suisse First Boston, London Office to provide an opportunity for one-on-one interactions with bidders to address concerns that might have arisen from their visits to the data room and the refinery site. The BPE boss also said Information Memorandum and Requests for Proposal would be sent to prospective bidders after the site visits and that bidding process would commence by end of this month with distribution of first mark up SPAs (Share Purchase Agreement) to bidders. Final SPA to be distributed to bidders first week of next month. Final bids to be received from bidders in second week of next month. She said financial close of transaction was envisaged for October 2005.
On Eleme Petrochemical Company Limited, Mrs Chibue said: "It has been bedeviled by high debt profile that had been identified as a potential bottleneck for the transaction."