Article Summary
- The National Council of Privatization has approved Transcorp Group as the preferred bidder for the acquisition of the Abuja Disco.
- It is unclear how much the reserve bid was and what timelines Transcorp Power has to pay for the asset, considering the $122 million debt owed by the former majority shareholders of the company.
- UBA took over Abuja Disco in December 2021 and stated that the asset is on track to be sold, with a conclusion expected this year.
The National Council of Privatization has approved Transcorp Group as the preferred bidder of the Abuja Disco.
This was made known by Vice President Yemi Osinbajo on Tuesday in Port Harcourt, Rivers State while commissioning the Afam 3-Fast Power Plant.
“Only yesterday, the National Council on Privatization formally delisted Transcorp Power PLC (formerly known as Ughelli Power PLC) from routine Monitoring & Evaluation by the BPE, indicating yet another successful power investment…..the last few days, I must say belong to Transcorp Power because, at the same meeting of the NCP, the council approved Transcorp Power consortium as preferred bidder for the acquisition of the Abuja disco.” Prof Osinbajo
It is unclear how much was the reserve bid and what timelines Transcorp Power has to pay for the asset considering the $122 million debt owed by the former majority shareholders of the company. Transcorp Group has about N5.8 billion in cash at the end of March 2023 and N23 billion in total debts.
Transcorp will likely have to raise fresh funds to pay for the asset.
Flashback
Recall in 2021, United Bank for Africa, UBA, took over Abuja Disco after the failure of the latter to meet the debt obligations set by UBA. The bank stated that Abuja Disco investors owe about $122 million forcing a takeover of the company.
UBA also provided more clarity in a recent investor call stating that the asset is on track to be sold which will help the bank to recover its money.
The bank’s Executive Director, Risk Management and Finance, Ugochukwu Nwaghodoh, state that the sale is at its advanced stage expecting a conclusion this year.
“We are at an advanced stage of discussion towards disposal and we believe that in the course of this year that will be totally consummated and we will be done with the full realization of that asset.” Nwaghodoh
UBA took over Abuja Disco in December 2021 after it accused core investors (KANN Consortium) of defaulting on its debt. KANN Consortium owned 60% of the Abuja Disco.