By Emma Ujah
The Joint Managing Director of Delta Steel Company Limited, DSC, Ovwian- Aladja Dr. Sam Nwabuokei  has said that its privatisation followed due process and warned that moves by interests groups to reverse the privatisation of the company would hurt its workers and the host community, in particular and the nation’s economy in general.

The battle for DSC between BUA International Limited and the current core investors, Global Infrastructures Nigeria Limited, GINL, has resurfaced with the on-going senate probe of the privatisation programme.

“We wish to state that the process of transaction leading to the purchase and subsequent acquisition of Delta Steel Company Plc (DSC) Ovwian- Aladja by Global Infrastructures Nigeria Limited (GINL) met international standard and best practices in privatisation of public enterprises all over the world. 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 privatisation lexicon, there is a clear distinction between a winner and a Preferred Bidder, Dr. Nwabuokei said in a memo to the committee.

The JMD added that all over the world, the standard practice in privatisation programme remained that where no Preferred Bidder emerges after a financial bid opening, the bidder who was a winner would be 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 happened 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 per cent of DSC.

Dr. Nwabuokei cited the current considering of willing seller-willing buyer strategy being adopted by the strategy for the ongoing privatisation of NITEL, as example stating that the case of DSC was not peculiar. BUA had claimed that the Bureau of Public Enterprises robbed it of the opportunity of buying majority stake in the DSC when it was put on offer in 2004 having emerged winner of the financial bid opening process.

Two bid processes were done on the sale of DSC. The first financial bid was opened on 16th June 2004 with Niger Benue Transport Company emerging winner with $10.25million. BUA was second with $7.5million while Osaka Steel came third with $2.55million. None of the bids met the reserved price. Therefore, the companies were told to review their offers at a second bid with BUA emerging as the highest bidder with $20.5million which was still considered below the reserved price.

GIL argued that it was after the close of the two bid processes that the BPE entered into the deal with it to buy the 80 per cent majority shares of the steel company, under awilling seller-willing buyer strategy.  GINL had made an offer of $30million on  December 14, 2004 which was approved on  December 17, 2004 . However, BUA went ahead to offer $31 million for the DSC shares on February 1, 2005.

in what Dr. Nwabuokei described as an gattempt to distract the privatization process, thwart and frustrate the contractual negotiationsh. BUAfs main point of argument has been that  it has a letter dated August 19, 2004 in which it said BPE authorised it to pay $25million for the purchase of DSC and other fiscal measures. However, the former Director General of BPE Dr. Julius Bala, who superintended over the sale of the DSC denied authorship of the said letter.