BPE gives KEPCO offer letter for Egbin plant

The Bureau of Public Enterprises has given an offer letter to KEPCO Energy Resources for the sale of 70 per cent of the Federal Government's shares in Egbin Power Plc.

This is contained in a statement signed by the Head, Public Communications, BPE, Mr. Chigbo Anichebe, in Abuja on Tuesday.

The News Agency of Nigeria quoted Anichebe as saying the 70 per cent government stake in the plant would be sold for $407.3m.

It will be recalled that the National Council on Privatisation, at its second meeting for 2013, approved the sale of 70 per cent of Federal Government's shares in the Egbin power plant to KEPCO Energy Resources for the amount.

It asked KEPCO to pay for 51 per cent of the plant's shares at the 2007 valuation figure of $549.01m and pay for the additional 19 per cent of the shares at the current valuation of $670m.

According to the statement, KEPCO is expected to pay 25 per cent of the money within 15 working days.

Anichebe said on receipt of the offer letter, KEPCO was expected to pay the balance of 75 per cent within 90 working days.

'In the approval, the council directed that the BPE reserves 10 per cent of the remaining 30 per cent for the workers and that the additional 90 per cent of the remaining 30 per cent shares be sold to the Nigerian people through Initial Public Offer at a later date,' he said.

It will be recalled that the privatisation of the power company was earlier concluded with KEPCO Energy Resources for the sale of 51 per cent on May 17, 2007 at a price of $280m.

An initial 10 per cent of that bid price or $28m was received at the time.

An escrow agreement was entered into by committing the payment of a further 50 per cent ($140m) of the purchase price within 90 days.

This was consequent upon the conclusion of due diligence by the investor in accordance with the terms of the sale.