The Federal Government has granted the request by Televeras Group and Northwest Power Plc- the preferred bidders for Afam Power Plc and Kaduna Electricity Distribution Company respectively for the extension of date of payment of the balance of 75 percent of purchase price by additional 60 days, from August 6, 2014 to October 6, 2014.
The Televeras Group pleaded the non-execution of the gas agreements required to bring the transaction to a financial conclusion and security challenges as reasons for seeking the extension.
It would be recalled that the Televeras Group-preferred bidder for Afam Power Limited had on May 19, 2014 requested from the Federal Government an extension of time to pay the balance of the 75 percent bid price for the power Company because gas agreement that is germane to the completion under the Share Purchase Agreement (SPA) it signed with the government had not been executed.
Televeras noted that the bankability of the transaction is predicated on the execution of the gas agreement and that the non-execution of the agreement has made it difficult to satisfy the due diligence enquiry required for the raising of funds for the financing of its pre and post acquisition plans.
For Northwest Power Limited, the preferred bidder for the Kaduna Electricity Distribution Company, it had on July 25, 2014, requested an extension of transaction timeline by 60 days due to the recent security challenges experienced within the Kaduna Electricity Distribution Company which made its offshore financiers to postpone disbursement of bank facilities already obtained.
The company explained that though it had secured financing for the transaction from a foreign bank, the bank had requested for additional time to review the transaction in the aftermath of the security challenges in Kaduna to ensure the safety of its funds.
Recall that Televeras had paid the initial deposit of 25 percent of the bid price of US$65,012,500 for the Afam Power Plant and Northwest Power Plc US$40,750,000 for the Kaduna Electricity Distribution Company following which the Share Purchase Agreements (SPA) were executed by the two parties.
They were required to pay the outstanding balance of 75 percent of the bid price within six months of the execution of the SPA on August 6, 2014.
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