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Steel Mill: Katsina Emerges Bid Winner
From Cletus Akwaya in Abuja, 11.15.2004
Privatisation
Katsina State Government through its investment company - Katsina State Investment and Property Development Company Limited (KASIPDCO) yesterday beat two other contenders to emerge winner of the bid for the Katsina Steel Rolling Mills. Yesterday's ceremony which held five months after the Federal Government sold the Delta Steel Company, Aladja near Warri, at $25 million to BUA International Ltd. was witnessed by Minister of State for Power and Steel, Prof. A. B. Borishade, Ambassador Ungwen Nwachukwu, Director of External Trade in the Ministry of Foreign Affairs as well as representatives of the Corporate Affairs Commission, Ministry of Finance Incorporated (MOFI) and National Economic Intelligence Committee (NEIC). The Katsina State investment firm, which made an initial offer of $715,000, the least in the first round of bids, improved its offer substantially in the second round to close at $3 million and eventually won the bid. In the first round of the financial bids which were opened at the Nicon Hilton Hotel and covered live on radio and televion, BUA International Limited offered $1.5milliion for 85 per cent equity in the ailing steel plant while Nigeria-Spanish Engineering Ltd. made an offer of $2.5 million for 100 per cent equity in the firm. Chairman, Technical Committee of the National Council on Privatisation (NCP), Mr. Akin Kekere-Ekun, who well as conducted the bid opening directed the bidders to revise their offer prices "substantially", saying the initial prices offered were far below the reserved prices set by the NCP. After a break of five minutes, the bidders returned with new offers in which KASIPDCO offered $3million, Nigeria-Spanish Engineering Ltd. $2.5 million and BUA International Ltd. $2.75 million. "At the moment, I can pronounce KASIPDCO as the winners of the bid and we will forward this to the NCP. If it is accepted by NCP, they can be announced as the preferred bidders," Kekere-Ekun declared shortly before the close of the brief ceremony. Borishade who spoke with THISDAY after the occasion commended the NCP for what he described as the transparent conduct of the exercise, adding that it was an opportunity for the steel company to roll back to life and make its contribution to the economy. "I am really excited about it. I think the winner got value for money because of the competition and the transparency with which it was carried out," he said of the transaction. To arrive at the final stage six companies had initially submitted expression of interest in the company including KASIPDCO, BUA International, Dantata Investment Ltd., Yisa Bello Nigeria Ltd., Intrisc Resources, and Nigeria-Spanish Engineering. However, only the three companies whose bids were opened yesterday participated in the due diligence and also submitted technical and financial bids.
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