FG to lose 20% holding in privatised national assets

All partly privatised national assets, except Gencos and Discos will be floated on the floor of the Nigerian Stock Exhange (NSE) with 20 per cent of their shares to be bought by members of the public, according to Bureau of Public Enterprises (BPE).

Though details of the total list of the private firms to be sold to the public are not yet known, the move is said to be aimed at returning the confidence of the public on the sales of the national assets since 2005.

Confirming the development in a statement, spokesman of BPE, Mr Chukwumah Nwoko quoted the BPE Director General, Mr. Alex Okoh, as saying that all the privatised public assets would not be quoted on the floor of NSE because some of them are not doing well as to attract investors.

Okoh said the government’s share divestment programme would mostly affect privatised firms in the petrochemical sector of Nigeria.

He said all the privatised firms were to be listed in the country’s stock market because public listings were part of the strategic objective of the reform and privatisation programme of the government.

Okoh stated that the BPE was undertaking a quick assessment of the partly privatised enterprises, especially in the petrochemical sector with a view to divesting the government’s shares in the capital market.

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According to him, “The BPE is working with core investors in certain privatised enterprises sold by deferred public offering to ensure that they sell at least 20 per cent of such entities to the market via public listing.”

He also stated that the bureau would henceforth ensure that the right core investors with the financial, technical, and managerial competences are selected in future privatisation exercises to ensure that they are capable of moving privatised entities to the desired level and make them attractive for public listings.

Okoh equally stated that the BPE would develop policies to attract additional private sector capital into the privatised companies to eventually provide confidence for the business and encourage their listings.

He noted that the BPE would also ensure that technical partners are retained in the privatised enterprises over the long-term and that there would be continued engagement with the relevant authorities to seek certain waivers where required to make public listings more easily achievable for them.

The statement noted that Okoh called for the establishment of an institutional framework to reach targets in both public and private sectors and to identify quick wins, medium term goals, and long term achievements.

Throwing more light on the companies being targeted for divestment of government shares in public assets, the BPE boss explained that of all the sectors that have so far been partly privatised, the companies that emerged from the electricity sector have not performed above 50 per cent.

“The Federal Government still retains about 40 per cent in Discos and Gencos from after the defunct Power Holding Company of Nigeria (PHCN) was split into various units, still the public is yet to be impressed and as such, any attempt to float them on the floor of NSE for shares may not attract the much expected patronage.

“From feed back, the electricity operators are underperforming and posting losses, which would not make them attractive propositions for the capital market.

“Several Nigerians have argued in the past that the enterprises privatised by BPE were cornered by a few individuals, but as part of the reform and privatisation strategy many of them were supposed to be listed on the stock exchange in the long-run.

“So listing them on the stock exchange will engender a sense of ownership in the assets by more Nigerians,” said Okoh.

But the BPE boss refused to disclose the number of assets being considered for the proposed initial public offers (IPOs).

 

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