Posted by From Etim Imisim in Abuja on
The financial bid opening of the Federal Superpho-sphate Fertilizer Company Limited (FSFC), Kaduna ended yesterday with Hekio Consortium Limited emerging the preferred winner.
* As BPE opens bids for Calabar, Warri Ports
The financial bid opening of the Federal Superpho-sphate Fertilizer Company Limited (FSFC), Kaduna ended yesterday with Hekio Consortium Limited emerging the preferred winner.
The company paid N500 million to close the transaction. Dangote Chemical Company Limited became the reserved bidder after offering N150 million.
The two companies returned for a revised bid after the Director General Bureau of Public Enterprises (BPE), Mrs. Irene Chigbue, said that their offer in the first round did not meet the reserved bid price.
The third prospective investor, One Global Limited, which had not paid the $15,000 non-refundable application fee, withdrew from the bid.
The transaction at the NICON Hilton Hotel in Abuja was witnessed by the chairman of Senate Committee on Privatisation, Saleh Usman Danboyi, who said the process was transparent and due diligence followed.
Hekio is an oil and gas company incorporated in 2003.
It is a consortium made up of local and foreign firms in engineering, fertilizer and petroleum production in Nigeria and overseas. One of its partners, Arkel International Inc of the United States of America, operates fertilizer and sulphuric acid plants worldwide, according to BPE.
Dangote was incorporated in 1985 to import and market fertilizer, agricultural and industrial chemicals. It is today producing and distributing them.
Established in 1973, the Federal Superphosphate Fertilizer Company Limited is owned 100 per cent by the Federal Government.
BPE said that the plant was designed to produce 100,000 metric tonnes of superphosphate per annum from a 42,000 tonnes per annum acid plant. In 1990, an additional unit with a capacity of 30,000 tonnes per annum of aluminum sulphate was added to the plant.
The Federal Government decided to revamp it with $8.8 million loan from the ECOWAS Fund .
"The ongoing revamp has significantly improved the physical state of the plant," Chigbue said.
Also yesterday, BPE started the pre-bid exercise for Calabar and Warri ports after it had sold Sunti Sugar Company to Dewo Integrated Limited.
Sunti Sugar Company, which Dewo Integrated Farms Limited bought, is jointly owned by the Federal Government (90 per cent) and the Niger State government (10 per cent).
Dewo Integrated Farms offered N185 million and emerged the preferred investor. The bid opened with Bua offering N50 million, Dewo N180 million and Tim N179 million.
The second round opened with Dewo offering an additional N5 and Tim another N1 million to become preferred and reserved bidders, respectively. Bua, however, did not increase its N50 million offer.
A sugar cane company, Sunti was established in 1974 as a limited liability company with a share capital of N100 million. It has a land mass of 15,000 hectares for production but never processed sugar, because the plant it needed to do so was never completed.
It has a debt of N615 million, owed mainly to the Federal Government and local creditors. As a result, Sunti's sale went through guided liquidation as the government intended only to get value for its assets.
The company was earlier offered to a core investor but the attempt failed, because of its huge debt.
"The report of our privatisation advisers showed that enough proceeds would not be realised to pay off creditors and settle staff liabilities," Chigbue said.
Based on this assessment, BPE went ahead to liquidate the company in 2003, after an approval from the National Council on Privatisation (NCP). But a petition to wind it up, filed at the Federal High Court in Abuja March 2004, stalled the process.
The bids reopened July 2005. Dewo Integrated Farms Limited, Bua International Limited and Tim International Limited took part in the technical bids, which prequalified them for yesterday's financial bids.
Meanwhile, the Minister of State for Transport, Malam Habib Aliu, opened the exercise, which marked the beginning of data room and physical due diligence for the concessioning of the ports. At the ceremony was Managing Director of Nigerian Ports Authority, Mr. Adebayo Sarumi.
The minister said that the programme was to encourage private and public sector partnership in the country.
He said government port reform is intended to establish the landlord concept of management while government still maintains ownership and supports infrastructure development. According to him, operating the ports as public institutions was the cause of inefficiency and low returns of revenue to users.