Investment Business - News - June 5, 2021

Bureau gives conditions for continued govt. support to privatized enterprises

The Federal Government says it was committed to providing the enabling environment and necessary support for all privatised enterprises in the country to perform optimally if they adhere strictly to the conditions underlining the objectives of privatisation exercise.
The Director General of the Bureau of Public Enterprises (BPE), Alex Okoh sgated this at the Handover of the Certificate of Occupancy (C of O) to the core investor of Ikorodu Bricks and Clay Limited (IB & CL), Continental Project Development & Supplies Ltd. (CPDSL) in Abuja.
Okoh said managers of the privatized entities must meet the conditions for their handover, name execution of revised performance agreement submitted by the core investor in May 2021.
Oklh said the Bureau would monitor closely the implementation of the post-acquisition plan (PAP) to ensure strict compliance.
Also, the core investor must note the addendum to the Share Sales/Purchase Agreement (SSPA) preventing them from the sale or disposal of part or the whole Shares or land of the company without the prior notice and approval of the Bureau. 
The Director General implored CPDSL  management to revive the company and bring it to profitability in the shortest timeframe and for the benefit of Nigerians.
The company’s Group Chairman, Albert Awofisayo said CPDSL would abide by the reviewed Share Purchase Agreement (SPA) to resuscitate the company to  be able to generate employment in the country.
He appealed to the Federal Government to intervene in the power supply situation in the  company, as the cost of generating power by the company was expensive.
Ikorodu Bricks & Clay Company, wholly owned by the Federal Government of Nigeria, was privatised through a core investor sale in 2006.
The company was acquired 100 percent by Continental Project Development & Supplies Limited (CPDSL) through a competitive bidding process.
Through the post-transaction monitoring exercise, it was discovered that IB&CL stopped operations few years after privatisation due to the core investor’s inability to raise capital to finance the operations, thus the company was listed among the non-performing Enterprises.
The company was listed as one of the non-performing enterprises and in the quest (through the Committee set up for non-performing enterprises) to identify the challenges inhibiting performance, CPDSL said the inability to raise capital to finance its operations as part of its challenges.
Consequently, the company approached the Bureau to secure Certificate of Occupancy (CofO) to enable them secure financial facility to resuscitate the company.
The Bureau consequently approached the Federal Ministry of Works and Housing to secure C of O for the company and the Ministry requested the Company to pay for the ground rent for the facilitation of the title document, prompting the Bureau to intervene and requested for a waiver to enable the company secure necessary finance to turn around the company to profitability.
Consequently, President Muhammad Buhari granted the waiver of the fee, and directed the Bureau to ensure the core-investor undertakes to revive the company after the waiver was granted.
 

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