Daily Independent Online.
*
Tuesday, August 24, 2004.
BUA
International emerges preferred bidder for Delta Steel
•Wants
payment spread over one year, tax holiday
By Sanya Adejokun,
Senior Correspondent, Abuja
The National
Council on Privatisation has formally declared BUA International Limited as the
preferred bidder for the troubled Delta Steel Company (DSC), Aladja Delta State
after it increased its June 18 bid of $20.5 million to $25 million.
Owned by Kano businessman,
Isiyaku Rabiu, BUA emerged the highest bidder for the 80 per cent equity shares
in Delta Steel Company after outbidding two other competitors- OSAKA Steels,
which bidded $2.55 million and Niger Benue Transport Company (NBTC), which
bidded for $10 million.
BUA showed great
determination to win the bid during the bids opening ceremony by substantially
upping its first round bid of $7.5 million to $20.05 million when Mr. Akin
Kekere-Ekun, chairman of the Technical Committee of the National Council of
Privatisation (NCP) announced the second round bidding conducted at the NICON
Hilton Hotel, Abuja.
But Kekere-Ekun,
while declaring BUA the winner of the day’s contest, refused to pronounce
it preferred bidder, insisting that the amount still fell short of the
undisclosed base price.
He said he would report to the council
and report back to the company but NCP finally approved its bid after it
increased the price during further negotiations.
Although BUA was
originally a trading company, it has since diversified into the real sector of
bulk cement re-bagging, flourmills, oil processing, fabrication and financial
services, according to the technical committee chairman.
However, The
Director-General of the Bureau of Public Enterprises (BPE), Dr. Julius Bala,
told Daily Independent in Abuja that the company has requested some
incentives from the council on the transaction.
According to him,
BUA has asked for a tax holiday and the payment of $20.5 million within 90 days
of its being conferred the status of preferred bidder and pay the balance of
$4.5 million one year thereafter.
This means that the
company would not have to pay the usual initial 10 per cent within 15 working
days of that conferment. “These requests have been forwarded for the NCP
for approval,” Bala stated.
The Group is said
to have established “enduring working relationships with foreign groups
as Midland Standard Inc, Cleveland, Ohio USA; Rooney Associates, USA; and
Kardemir Iron & Steel Works, Karabuk, Turkey.
“BUA has a
proven technical partnership and management agreement with Ferro International
Trade Inc., Ankara, Turkey for the iron and steel projects. This Turkish Iron
and Steel firm has agreed to work with Kardemir Integrated Iron and Steel
Company to support BUA,” Kekere-Ekun declared.
Established at a
cost of $1.5 billion, DSC started operations in 1982 and achieved 25 per cent
of installed capacity in 1985 but stopped production in 1996 due to working
capital restraint.
According to Bala,
the
rehabilitation of
the company could not go on because only the Federal Government paid its
financial
obligation of $45
million while the contractors failed to remit $55 million and $40 million
counterpart funding respectively.
Following this, the
NCP approved the immediate privatisation of the company on the basis of 80 per
cent to core investor, 10 per cent to local community and 10 per cent to DSCstaff.
