BFI Group to Inject $300m in ALSCON
NCP may approve transaction today
From Cletus Akwaya in Abuja
BFIGroup, the company that won the bid to take over 77.5 per cent equity in the Aluminium Smelter Company of Nigeria (ALSCON) Monday, plans to invest about $300million in the Ikot Abasi -based plant to return it to full operations. The consortium is owned by US-based Nigerians with Dr Reuben Jaja, as President and Chief Executive Officer (CEO).
The National Council on Privatisation (NCP) may today, however, confirm BFI Group as preferred bidders although the $410 million bid price fell below the reserve price.
BFIGroup's business plan obtained exclusively by THISDAY show that though the consortium would actually require $250 million to revitalise ALSCON which stopped production since 1999, it has nevertheless secured a $300 milion facility from Daewoo Interna-tional (American) Corporation .
Details of the technical work to be undertaken by the would be investors include "installation of three multipurpose pot tending cranes, two side loading trucks for anode tarnsportation, one beam raising system, 108 pot shells, 108 complete superstructures, materials for 216 complete cell linings, cold ramming paste for 108 cell linings, bus bar for 108 pots, and 108 cell micro-processors."
"Upon our review of the key cost elements with regard to the operations of the company raw material needs of the company, labour costs, overhead with regard to all the profit centres, including power, our technology and management board has concluded that ALSCON will require an infusion of approximately $250 million to activate operations. Consequetly, we have made arrangements for the procurement of raw materials with a credit of more than $300 million," the business plan document said in part.
Under the plan submitted to the Bureau of Public Enterprises (BPE), BFI Group plans to run the different units of ALSCON as semi-autonomous units with the designation of "profit centres" for the 10 units.These include aluminium plant management, power generation, gas processing, harbour and marines services, estate management, medical services, water treatment and production, laboartory research and bauxite exploration, industrial security and freighting and training and industrial education.
THISDAY checks in Abuja yesterday, however, revealed that the NCP may approve the bid today although the $410 million bid price offered by BFI Group did not meet the reserve price.
It was learnt that rather than allow the plant shut since 1999 to lie waste, government had thought it better to sell it at the price offered by BFIgroup.
Also, the Federal Government was said to be mindful of the wrong signals the cancellation of the bid might send to the international investment community especially after disqualification of Rusal (Bratsk), the Russian firm which also bidded at the last minute.
It was also learnt that BFIGroup had made presentations to all key stakeholders including the President and other key government functionaries to convince them of their capability outside of the BPE guidelines.
Chairman of the NCP, Vice Presient Atiku Abubakar, a source told THISDAY, would issue approval BFI Group as the preferred bidders tomorrow so the consortium could make payment in line with negotiations reached with the BPE.
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