KEPCO acquires 70% share of Egbin Power Plant

The Bureau of Public Enterprises (BPE) has transmitted an offer letter to KEPCO Energy Resources in respect of the Share Purchases Agreement (SPA) for the 70% sale of Federal Government’s shares in Egbin Power Plant at the cost of USD$407.3million.

This was contained in a statement released by  BPE  at the end of the second meeting of  National Council on Privatisation (NCP) for 2013, held at the Presidential Villa, Abuja.

It said “NCP had approved the sale of 70% of Federal Government’s shares in Egbin Power Plant to KEPCO Energy Resources at that amount”.

The Council also reminded KEPCO to as a matter of seriousness pay the 51% of the plant’s shares at the 2007 valuation, worth USD$549.01 million as well as the payment of the  additional 19% of the shares at its current value of USD$670 million.

In the letter conveying the NCP’s approval to KEPCO, the Acting Director-General of BPE, Mr. Benjamin Ezra. Dikki, said KEPCO is expected to pay 25% of the money within 15 working days from the day of receipt of the offer letter and the balance of 75% within 90 working days (3 Months).

The Council equally directed that the BPE reserves 10% of the reminder of 30% (which is 3%) for the workers and the remaining 90% of the 30% shares (which is 27%) to be sold to the Nigerian people through Initial Public Offer (IPO) at a later date.

The privatization of the  Power Plant was earlier concluded with KEPCO Energy Resources emerging as the favoured company to buy 51% of its shares on  May 17, 2007 at a price of US$280 million.

An initial 10% of that bid price in the sum of US$28 million was received at the time and an escrow agreement was entered into by committing the payment of a further 50% (US$140 million), of the purchase price within 90 days after the conclusion of due diligence by the investor in accordance with the terms of the sale.