Prof. Bart Nnaji
The decision by the Central Bank of Nigeria (CBN) to bar the banks from extending loans to 113 companies and their directors could affect the proposed privatisation of the power generation and distribution companies created from the unbundling of the Power Holding Company of Nigeria (PHCN), as some of the promoters of the blacklisted companies will not be able to borrow from local banks to pay for the power assets or raise working capital.
For instance, Rockson Engineering, which has Sir Johnson Arumemi-Ikhide, as one of its principal shareholders, will be bidding to acquire the Ikeja, Benin and Port Harcourt Distribution Companies.
Last Tuesday, Rockson Engineering was prequalified by the National Council on Privatisation (NCP) to have its financial bids opened on October 10, having scaled through the technical bid process.
Other bidders affected by the CBN directive include Geometric Electric and Nestoil, both of which are bidding for distribution and generation companies, respectively.
Geometric, which belongs to the former Power Minister, Prof. Bart Nnaji, is part of the Eastern Electric Nigeria Limited Consortium. Eastern Electric was prequalified by the NCP to bid for Enugu Disco, while Nestoil will on September 25, have its financial bid opened for Sapele Power Company Limited.
Also, it is believed that one of the promoters of Amperion Power Distribution Company, which is bidding for Ughelli and Geregu Power Plants, as well as Ikeja Distribution Company, was among those blacklisted by the CBN.
Added to the uncertainty hanging over their bids, following the CBN directive, is the fact that the Bureau of Public Enterprises (BPE) is currently undertaking a “fit and proper”test or due diligence of the bidders to ascertain their technical and financial capacity to take over the power assets and turn them around.