ABUJA-The core investor in the controversial sale of Delta Steel Company, DSC, Aladja, Delta State, Global Infrastructures Nigeria Limited, GINL, Wednesday said that it bought the company legitimately.

GINL said in a memo to the Senate Ad-hoc Committee probing the privatization programme, from 1999 to date, that claims by other interests that the deal fell short of due process was misleading.

GINL bought 80 per cent stake of the steel company at the sum of $30 million in December , 2004 and concluded negotiations on the shares-sale and purchase agreement with the BPE on January 13, 2005.

The company said: “The transaction that led to their acquisition of 80 percent shares of the organisation met international best practices and due process in privatisation of public companies in Nigeria and all over the world”.

BUA International Limited, which lost out in the bid process after offering $25 million which was later upped to $31 million, told the Senate committee that it was robbed of the DSC.

But GINL said there was no truth in the claim, as according to the investors, BUA was never declared preferred bidder throughout the bidding process.

GINL’s memo which was signed by the Joint Managing Director of Delta Steel Company, Dr. Sam Nwabuokei, on behalf of the investor, said had no case against it.

“We state unequivocally here, that BUA was never declared a preferred bidder throughout the processes leading to the sale of DSC, even though BUA emerged as the winner/highest bidder of the bid process at the second round. It should be noted that in the privatization lexicon, there is a clear distinction between a winner and a preferred bidder.

“ A winner is a bidder with the highest bid but below the reserve price while a preferred bidder is the bidder whose bid is either at the same level with, or higher than the reserve price.  This was explained by Dr Julius Bala, former Director-General of BPE. These technical terms are also known to those involved in privatization transactions.

“All over the world, the standard practice in privatization programme is that where no Preferred Bidder emerges after a financial bid opening, the bidder who was a winner is invited for further negotiations in other to arrive at an acceptable offer and if after several attempts, no acceptable offer is agreed, the bidding process is closed. When this happens, fresh negotiations are entered into with a view to arriving at an acceptable purchase consideration. This stage is called Willing Seller/ Willing Buyer option. It was through this process that GINL acquired 80% of DSC. BPE has used this strategy in the past. The Federal Government of Nigeria is considering adopting the strategy for the ongoing sale of NITEL,” GINL explained.

According to the investors, the two bid processes in which BUA participated had closed before the BPE commenced the willing seller-willing buyer option through which the company was eventually bought.

GINL claimed it was a responsible Nigerian corporate citizen which employs 3000 Nigerian workers and operating DSC at 30 per cent of installed capacity.

“DSC which is currently the only functional integrated steel company in Nigeria is operating at about 30 percent of installed capacity. DSC would have been operating at 100% of installed liquid steel capacity by now if the concession agreement for NIOMCO was not withdrawn. In spite of the harsh investment climate in the country coupled with the fact that we make use of only scrap as raw material presently, DSC has about 3000 Nigerian workers in its payroll”, it added.


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.