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Federal Govt Moves to Take over ALSCON from Russia’s Rusal
Edited by : AL CIRCLE
3 min read
Following a Supreme Court judgment, which revoked the sale of the Aluminium Smelter Company of Nigeria (ALSCON) by the Bureau of Public Enterprises (BPE) to Rusal, a Russian company, the Federal Government said it has commenced the process of handing over the company to BFI Group.
In December 2006, Rusal acquired 77.5 per cent of the Federal Government’s shares in ALSCON for $205 million. However, Rusal’s acquisition of ALSCON was mired in controversy, as the Russian firm did not win the bid during financial bid opening process held by the BPE.
Rather, the BFI Group, which was the preferred bidder, was side-tracked by former President Olusegun Obasanjo at the time, and Rusal was selected to acquire ALSCON.
Displeased by the Federal Government’s decision, BFI went to court to challenge the process and got a Supreme Court ruling in its favour last July.
The Supreme Court, had on July 8, ordered the BPE to execute the share purchase agreement with BFI Group to enable the company to pay the agreed 10 per cent of the accepted bid price of $410 million within 15 working days from the date of the execution of the share purchase agreement.
Director General, BPE, Ms. Bolanle Onagoruwa, told THISDAY in an exclusive chat yesterday that it had no choice than to heed the Supreme Court directive.
“It is a Supreme Court judgment and we are bound to obey it,” she said.
She said the agency had held series of meetings with the Russians and had already informed them of plans to take back the plant.
But, the Russians, THISDAY gathered, are demanding compensation from government before they are dislodged.
The BPE boss, however, said it had asked Russal to make a formal request stating how much it requires in compensation.
THISDAY further learnt that Russal is likely to be evicted from the plant even before it gets the proposed compensation.
Onagoruwa said as ordered by the Supreme Court, government had already commenced the process of finalising the Share Sale Purchase Agreement, which is supposed to be signed with BFI Group.
She said: “What they (Russal) are saying is that they want compensation because in the agreement that we signed with them, we said in any circumstances like this, we would indemnify them.
“We don’t have to wait for the negotiations to be completed before BFIG takes over,” she added
In a judgment delivered by five justices, the Supreme Court had unanimously agreed that there was a binding contract between BFI Group and the BPE, which should be enforced.
Justice Afolabiyi Fabiyi, who delivered the lead judgment, held that BPE should not have gone ahead to sell the company to Rusal or any other company.
He said Rusal should have refrained from buying the company when it was aware that BFI Group, which was chosen as the preferred bidder before BPE unilaterally frustrated the contract, was already in court to challenge BPE’s refusal to consummate the transaction.
In December 2006, Rusal acquired 77.5 per cent of the Federal Government’s shares in ALSCON for $205 million. However, Rusal’s acquisition of ALSCON was mired in controversy, as the Russian firm did not win the bid during financial bid opening process held by the BPE.
Rather, the BFI Group, which was the preferred bidder, was side-tracked by former President Olusegun Obasanjo at the time, and Rusal was selected to acquire ALSCON.
Displeased by the Federal Government’s decision, BFI went to court to challenge the process and got a Supreme Court ruling in its favour last July.
The Supreme Court, had on July 8, ordered the BPE to execute the share purchase agreement with BFI Group to enable the company to pay the agreed 10 per cent of the accepted bid price of $410 million within 15 working days from the date of the execution of the share purchase agreement.
Director General, BPE, Ms. Bolanle Onagoruwa, told THISDAY in an exclusive chat yesterday that it had no choice than to heed the Supreme Court directive.
“It is a Supreme Court judgment and we are bound to obey it,” she said.
She said the agency had held series of meetings with the Russians and had already informed them of plans to take back the plant.
But, the Russians, THISDAY gathered, are demanding compensation from government before they are dislodged.
The BPE boss, however, said it had asked Russal to make a formal request stating how much it requires in compensation.
THISDAY further learnt that Russal is likely to be evicted from the plant even before it gets the proposed compensation.
Onagoruwa said as ordered by the Supreme Court, government had already commenced the process of finalising the Share Sale Purchase Agreement, which is supposed to be signed with BFI Group.
She said: “What they (Russal) are saying is that they want compensation because in the agreement that we signed with them, we said in any circumstances like this, we would indemnify them.
“We don’t have to wait for the negotiations to be completed before BFIG takes over,” she added
In a judgment delivered by five justices, the Supreme Court had unanimously agreed that there was a binding contract between BFI Group and the BPE, which should be enforced.
Justice Afolabiyi Fabiyi, who delivered the lead judgment, held that BPE should not have gone ahead to sell the company to Rusal or any other company.
He said Rusal should have refrained from buying the company when it was aware that BFI Group, which was chosen as the preferred bidder before BPE unilaterally frustrated the contract, was already in court to challenge BPE’s refusal to consummate the transaction.
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