ALSCON: BPE, BFIG on Collision Course over Share Purchase Agreement Row

James Emejo There are indications that the Bureau of Public Enterprises (BPE) and the BFI Group may be headed for a long drawn battle over the execution of the Share Purchase Agreement (SPA) prior to the handing over of the Aluminium Smelter Company of Nigeria (ALSCON) to the latter. THISDAY investigations revealed that there is a deep contention between the privatisation agency and the BFIG, which had originally won the bid to manage the aluminium company. The controversy, THISDAY gathered, bothered on the recent SPA, which the agency had sent to BFIG for signing following a Supreme Court directive which had ruled in favour of the latter that ALSCON be revoked from UC Rusal- the current management. In the SPA, which the BPE had sent, BFIG was asked to pay $410 million as directed by the court in accordance with a May 2004 agreement. But the Group said it had earlier been issued a negotiated SPA in accordance with May 2004 agreement, which had put the price of ALSCON at $250 million. The BFIG believed the initial value represented the true worth of the company insisting that the new SPA was fraudulent. THISDAY also gathered that Rusal, which was the reserved bidder in the privatisation of ALSCON may have paid $250 million for the asset. BFIG, it was learnt had consequently indicated its objection to the BPE that it would only honour the initial SPA and demanded that the agency provided its bank details to enable it payment into it. But the BPE, THISDAY learnt, has remained adamant insisting that BFIG must pay $410 million as earlier agreed and ordered by the apex court. Nevertheless, BFIG had also maintained that there was no way it could pay $410 million for ALSCON even when it had been clearly established that Rusal had fraudulently devalued the company’s assets from about $1.2 billion in 2004 to only about $91 million as at 2011. It was however gathered that the apex court had in its ruling given a perpetual injunction banning the Federal Government from the sale or otherwise of ALSCON to any other party. It would then mean that ALSCON cannot be sold to any other without first nullifying the injunction. The apex court, it was further learnt, had also made provision for the safety of ALSCON’s assets; rendition of audited financial accounts as well as revision of bids. Only recently, Rusal had accused BFIG for violating the apex court order by refusing to pay $410 million and insisted that it remained the legal owner of the company as long BFIG falls short of honouring its financial obligations. A reliable source at the BPE, however, told THISDAY, that the terms of the apex court ruling must be carried out adding that there was no evidence yet that ALSCON’s assets had been devalued. “If I were them (BFIG), I will first honour the Supreme Court judgement and pay the N410 million before making further argument,” the source said. It added that as long as the $410 million was not paid by BFIG, Rusal technically remains the legal owner of ALSCON.