Federal Government of Nigeria terminates sale of Alscon to BFIG

The National Council on Privatisation approved the termination of BFI Group’s offer to purchase 77.5 per cent of Aluminum Smelter Company of Nigeria “following their inability to pay the agreed 10 per cent of the offer price within 15 working days of the execution of the Share Sale/Purchase Agreement as directed by the Supreme Court of Nigeria.”

However, the cancellation came on a day UC Rusal, the current operator of ALSCON, announced that it had suspended aluminium production at the company due to losses occasioned by unreliable gas supply and uncertainty over the legal ownership of ALSCON.

The deadline for the execution of the SPA and payment of the 10 per cent of the offer price elapsed at 12 am on Monday, with BFIG yet to execute the SPA or pay the initial mandatory 10 per cent of the bid amount.

BFIG, which was the plaintiff in the suit at the Supreme Court, was expected to execute the SPA and pay the agreed 10 per cent of the offer price of $410 million within 15 days of the execution of the SPA as directed by the Supreme Court.

But the BPE, in a statement yesterday said: “The BFIG, in total disregard of the apex court, drafted and executed an agreement that was different from the one ordered by the Supreme Court”, adding that “It is important to state for the records that every step the Bureau of Public Enterprises had taken in this matter, it had relied on the Supreme Court judgment, including the price and the timeline were set by the Supreme Court and the BPE as a responsible agency has complied with every step of the way.”

Reacting, however, to the Federal Government’s termination of the offer, Rusal’s Spokesman, Mr. Albert Dyabin, told that the legal ownership of ALSCON remained uncertain as only the Supreme Court could finally terminate the sale of the company to BFIG.

Rusal said yesterday that “the on-going legal situation around the illegal attempts to challenge Rusal’s rights of ownership to the plant and the recent decision of the Supreme Court of Nigeria to cancel the sale of ALSCON shares to Rusal” had impacted on long-term investment in the company.

He said that the suspension of operations at the plant was only a temporary measure necessary to avoid complete shutdown, adding that Smelting operations would resume as soon as the legal uncertainty had been resolved and continuous power supply secured.

However, the BFIG in its notice of motion, has asked the apex court for "an order directing the Respondent to fully enforce, fulfill and effect to the meaning and intendment of the judgment of this honorable Court dated 6 July 2012 by signing and executing forthwith the mutually agreed Share Purchase Agreement (SPA)"