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BPE to open IPOs for Eleme, SAHCOL, others
By Clara Nwachukwu and Helen Oji | 25 September 2018 | 4:23 am

Mr. Alex Okoh, Director-General, Bureau of Public Enterprises (BPE)

As market investors show apathy
Within the next two months, the Bureau of Public Enterprises (BPE), plans to make public share offerings for some of the privatised state-owned enterprises, in which the Federal Government had diluted a significant amount of its equity.

Among those scheduled for the IPOs are; Indorama Eleme Petrochemicals Limited; Skyway Aviation Handling Company Limited (SAHCOL), 100 per cent owned by the Sifax Group; and Nicon Insurance Limited.

Under the plan, the IPO for the shares of the Nigerian Machine Tools (NMT), Osogbo, Osun State, will be done next year, BPE Director, Development institution and National Resources, Mr. Joe Anichebe, told journalists on Saturday, at a seminar in Abeokuta, Ogun State.

Responding to why many years after the divestment, the Government has not been able to offer the shares of some of the privatised SOEs or list them on the Nigerian Stock Exchange, Anichebe explained, it was a risk the BPE could not afford, as many of the SOEs were not profitable.

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“You know that the first rule to listing on the Exchange is that you have to be profitable, and we don’t want to risk the money of poor Nigerians by offering IPOs for those companies when they are not being profitable,” he reminded journalists.

However, equity market investors are not particularly enthusiastic about the proposed IPOs, saying the offers will be coming at inauspicious time, considering it’s the peak of political uncertainties which had caused persistent downturn in stock market.

They would prefer the BPE deferred the IPOs to enable investors prepare for the offers for increased and enhanced participation.

The former Secretary General, Independence Shareholders Association of Nigeria, Adebayo Adeleke, argued that coming at this point time the IPOs may already be targeted at strategic investors, and not retail shareholders because the timing would not attract full participation from local investors.

“If BPE wants to float Eleme Petrochemicals at this time, the target market cannot be retail investors that will buy 100-500 units…, they have already shortlisted strategic investors.

“They cannot bring it at a time of the year when we are facing election. Why are they in a hurry to float within a month, it has been there for decades, and they want to sell off at this turbulent era, unless you have backdoor arrangement,” he said.

Similarly, the President, Standard Shareholders Association, Godwin Anono, said: “This is not a good time at all, everybody is struggling to feed; nobody is ready to put money into any offer now. They should postpone it, else no retail investor will subscribe to it.”

A Capital Market expert and Head, Banking and Finance Department, Nasarawa State University Keffi, Prof Uche Uwaleke, who noted that timing, is critical to the success of an IPO.

In his opinion, “Regarding the Eleme petrochemical, I think the BPE calendar for coming to the market is in order. This is one company that will galvanise a lot of investors’ interests in view of its potential.

“The current political situation or headwinds in the economy will not stop such an IPO from unlocking idle investible funds, including those of foreign investors, who are bound to show more than a passing interest in the offering.”


Vice President, Prof. Yemi Osinbajo, Chairman, National Council on Privatisation

Recall that Notore Industries Plc, privatised by Government in 2015, last month took the bull by the horns to list on the NSE, a development that both regulators and stakeholders have applauded as a step in the right direction to lift the stock market.

Notore, an agro-allied and fertiliser company, was in dire need of working capital, and achieved a N100.75 billion ($330 million) valuation by listing on the Exchange, with a free float of 16 percent. It listed 1.61 billion ordinary shares at N62.50 each.

Notore’s Chief Executive, Onajite Okoloko, told stockbrokers during the listing that the offering will increase access to capital to fund its growth plans. “We have now secured funding to carry out the required Turn-around Maintenance (TAM) programme of the plant, which is expected to be completed by the third quarter of 2019,”he assured.

Already, the public is divided on the success of government’s privatisation programme, which began in 1986, with many calling for outright nullification, as many of the enterprises are doing very poorly, and fallen short of their share purchase agreements (SPAs).

Anichebe recalled that with over N13 trillion sunk into about 590 SOEs, whose return on investment (RoI) were less than 0.5 per cent, it became obvious that Government had no business running businesses.

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Indeed, political interference in the daily operation of the SOEs appears to be the main cause of their poor performances, which made it imperative to subject these enterprises to the discipline of market forces through privatisation.

But whether privatisation will lead to the desired transformation of an enterprise depends heavily upon the creation of a suitable institutional framework. In the case of the nation’s power sector, Nigerians are unanimous the objectives have failed.

However, the BPE argued that power failure is more a case unfulfilled promises by both the government and the investors.

Regardless of its adoption by many countries, privatisation of SOEs is one of the recommendations of the World Bank, and International Monetary Fund (IMF) for developing nations, and is in fact, a condition for receiving their funds.

Due to the loan agreements and pressures from the international lenders, countries, including Nigeria began the process with the implementation of a Structural Adjustment Programme (SAP), which included the divestiture of government’s interests in the SOEs.
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In this article:
Adebayo AdelekeBureau of Public EnterprisesIndorama Eleme Petrochemicals LimitedSAHCOL

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https://guardian.ng/business-services/bpe-to-open-ipos-for-eleme-sahcol-others/amp/

unsustainable loan equally means selling collateral cheaply. or how are we to pay $150m world bank polio loan, or $2.1bn loan to finance 7 projects which isn't self sustainable. or is it still this 1.8bpd crude oil we bank on. well just like a man like obasanjo came back to clean up the debt mess of buhari/babangida/abacha loan when it was at $30bn collectively, let see how they pay back the current over $65bn debt by Jonathan/buhari. else we can forget assets like apapa port, abuja/Lagos/kano airport, LNG bonny, Kaduna and warri refinery

iammo:
unsustainable loan equally means selling collateral cheaply. or how are we to pay $150m world bank polio loan, or $2.1bn loan to finance 7 projects which isn't self sustainable. or is it still this 1.8bpd crude oil we bank on. well just like a man like obasanjo came back to clean up the debt mess of buhari/babangida/abacha loan when it was at $30bn collectively, let see how they pay back the current over $65bn debt by Jonathan/buhari. else we can forget assets like apapa port, abuja/Lagos/kano airport, LNG bonny, Kaduna and warri refinery

That means China is taking over

Stop the dullard now!!!!

Why can't he sell of assets in the northern part of Nigeria?

weyreypey:

That means China is taking over

from my own views, we can still pay back, through serious fiscal responsibility. cut all useless government spending, no more security votes, no more constituency project, no more travelled allowance and estacodes, no more bogus office running cost. in addition all federal roads should be tolled and people pay per km travelled, heavy truck should be badly tolled and tax, railway must tackle huallage problems. people like dangote should partner with Nigerian Railway cooperation. each ministry must generate money before been given allocation. health ministry should get paid from health insurance, and medical center should be upgraded to foreign standard and start reducing medical tourism, ministry of works must start handling construction contacts rather than giving out contracts. ministry of water can make so much from municipality portable water

iammo:


from my own views, we can still pay back, through serious fiscal responsibility. cut all useless government spending, no more security votes, no more constituency project, no more travelled allowance and estacodes, no more bogus office running cost. in addition all federal roads should be tolled and people pay per km travelled, heavy truck should be badly tolled and tax, railway must tackle huallage problems. people like dangote should partner with Nigerian Railway cooperation. each ministry must generate money before been given allocation. health ministry should get paid from health insurance, and medical center should be upgraded to foreign standard and start reducing medical tourism, ministry of power must start handling construction contacts rather than giving out contracts.

It's not as easy as you analyse.
Buhari has borrowed twice what PDP borrowed in 16 years!
In 2017 alone, Nigerian government made ₦1.1 trillion from oil and spent ₦1.8trillion servicing debt!

When I say servicing debt, I am not referring to repaying the debt. I am saying that ₦1.8 trillion was used to pay the INTEREST on the debt. The PRINCIPAL is not even being touched. It is your children and grandchildren that Buhari wants to pay his debts.

Now tell me how we can pay this huge interest and still manage to repay the loan capital in this generation?

gentlegenius:

It's not as easy as you analyse.
Buhari has borrowed twice what PDP borrowed in 16 years!
In 2017 alone, Nigerian government made ₦1.1 trillion from oil and spent ₦1.8trillion servicing debt!

When I say servicing debt, I am not referring to repaying the debt. I am saying that ₦1.8 trillion was used to pay the INTEREST on the debt. The PRINCIPAL is not even being touched. It is your children and grandchildren that Buhari wants to pay his debts.

Now tell me how we can pay this huge interest and still manage to repay the loan capital in this generation?

Deep trouble!

gentlegenius:

It's not as easy as you analyse.
Buhari has borrowed twice what PDP borrowed in 16 years!
In 2017 alone, Nigerian government made ₦1.1 trillion from oil and spent ₦1.8trillion servicing debt!

When I say servicing debt, I am not referring to repaying the debt. I am saying that ₦1.8 trillion was used to pay the INTEREST on the debt. The PRINCIPAL is not even being touched. It is your children and grandchildren that Buhari wants to pay his debts.

Now tell me how we can pay this huge interest and still manage to repay the loan capital in this generation?

the moment Nigeria government starts seeing it self as a profitable service provider to a large market of 189 citizen the sooner we are out of the debt. all Nigerian problem is a potential money spinner for the government dangote knows this too well. but as usual the mentality indoctoring of the salary earning Coupist ruler we have had in the past about government not having business doing business is our downfall. a fully functional ajaokuta can generate so much steel we'd be exporting steel based products in million tonnes. Dubai a desert earns so much from municipality pipe water supply northern Nigeria can earn double that from water. think about fuel usage imagine Nigeria getting to refine 60m litters daily. we can slowly turn all our problems to big money spinners

we must pack out this govt of buhari

gentlegenius:

It's not as easy as you analyse.
Buhari has borrowed twice what PDP borrowed in 16 years!
In 2017 alone, Nigerian government made ₦1.1 trillion from oil and spent ₦1.8trillion servicing debt!

When I say servicing debt, I am not referring to repaying the debt. I am saying that ₦1.8 trillion was used to pay the INTEREST on the debt. The PRINCIPAL is not even being touched. It is your children and grandchildren that Buhari wants to pay his debts.

Now tell me how we can pay this huge interest and still manage to repay the loan capital in this generation?

That is the lifeless being NgeneUkwuewu, sarrki, Butterflyleo and his cohorts Imposed on us.


But good citizens of Nigeria is working tirelessly to make sure he did not return.

Oil and gas prices are the highest since he became President, so what is his excuse now?

gentlegenius:

It's not as easy as you analyse.Buhari has borrowed twice what PDP borrowed in 16 years!In 2017 alone, Nigerian government made ₦1.1 trillion from oil and spent ₦1.8trillion servicing debt!

When I say servicing debt, I am not referring to repaying the debt. I am saying that ₦1.8 trillion was used to pay the INTEREST on the debt. The PRINCIPAL is not even being touched. It is your children and grandchildren that Buhari wants to pay his debts.

Now tell me how we can pay this huge interest and still manage to repay the loan capital in this generation?

God bless you so well brother man.

Racoon:
After the frenzy of the worthless Chinese currency swap in the early stage of this hopeless goverment to other borrowings.

See the abysmal state of monument indebtedness Buharimonics clueless have landed Nigeria.Our generation is already oweing debts the dullard government have seriously incurred for us.

It is so sad!!

Op only posted this to attract the masturbating wailers

You wailers should all go and die!

Racoon:
After the frenzy of the worthless Chinese currency swap in the early stage of this hopeless goverment to other borrowings.

See the abysmal state of monument indebtedness Buharimonics clueless have landed Nigeria.Our generation is already oweing debts the dullard government have seriously incurred for us.

while its important to marvel at the impending calamity of the debt, and horrible performance of this government. it would be positive and productive for us all who understand the enormity of the problem, to start thinking of a solution, so as to be able to compare our ideas with the manifestos of the another political party, so as to quickly detect fraudulent campaign promises as 2019 is fast approaching. I do ask that we also talk about solutions to savage our nation, as major ideas are shared and gotten from simple national discuss like this

CC; gentlegenius , weyreypey

No investment under APC govt except evil loans....unrepayable loans.... Now the next is selling off national assets domiciled in the southern part of Nigeria!!

iammo:


while its important to marvel at the impending calamity of the debt, and horrible performance of this government. it would be positive and productive for us all who understand the enormity of the problem, to start thinking of a solution, so as to be able to compare our ideas with the manifestos of the another political party, so as to quickly detect fraudulent campaign promises as 2019 is fast approaching. I do ask that we also talk about solutions to savage our nation, as major ideas are shared and gotten from simple national discuss like this

CC; gentlegenius , weyreypey

We need to get this clueless administration out very fast...

weyreypey:

We need to get this clueless administration out very fast...

I agree, but we hastely got rid of Jonathan, only to replace him a disaster who in short while doubled all the nation missery. so I really think we should take time with the sorting process of who rules us and what are they offering

iammo:

I agree, but we hastely got rid of Jonathan, only to replace him a disaster who in short while doubled all the nation missery. so I really think we should take time with the sorting process of who rules us and what are they offering

Agreed. But I think this country is doomed... Unless a miracle happens... Leading politicians are open sepulchres no interest of the masses at all. In Ghana you use your personal car and govt gives you a stipend for fueling. In Nigeria these criminals use bogus convoys including Yusuf Buhari with a BMW power bike

Buhari is from Niger Republic

That’s why he does weird things like this

krendo:
Buhari is from Niger Republic

That’s why he does weird things like this

Like borrowing unsustainable loans to build railway to Niger republic?

weyreypey:

Like borrowing unsustainable loans to build railway to Niger republic?

Just look at where Daura is on the map and you will understand

He is even building a refinery in Katsina as a joint venture with Niger republic

krendo:


Just look at where Daura is on the map and you will understand

He is even building a refinery in Katsina as a joint venture with Niger republic

And selling off assets in the south.

iammo:


while its important to marvel at the impending calamity of the debt, and horrible performance of this government. it would be positive and productive for us all who understand the enormity of the problem, to start thinking of a solution, so as to be able to compare our ideas with the manifestos of the another political party, so as to quickly detect fraudulent campaign promises as 2019 is fast approaching. I do ask that we also talk about solutions to savage our nation, as major ideas are shared and gotten from simple national discuss like this

CC; gentlegenius , weyreypey

Thanks for pointing this out... Only a clueless person will complain about problems without thinking of the solutions.
Like someone said above, the first solution to this menace is voting out buhari by next year, because he doesn't even see our huge debts as a problem.

Then our next president must begin to think more about repaying the debt than borrowing more money. But even if he borrow, it must be spent on projects that will generate income for the government. Debt is not really a bad thing. Some countries have used debts to progress. It is what the government does with the borrowed money that matters. There are two types of debt - good and bad. Good debt are asset to the debtor, while bad debt are liabilities. How you use the borrowed money determines the type of debt you acquire for yourself(in this case, for our country).
The question now is what does buhari do with all the money he borrowed?
Here are the answers...
1. Fuel subsidy: Buhari's government promised to stop fuel subsidy but now they are spending about 2.4 billion Naira everyday on fuel subsidy. Imagine a country that is blessed with abundant oil, selling crude oil to other countries and buying petrol from them at a cost that is nearly 3 times higher than the cost of crude oil. All this is because buhari cannot maintain a single refinery even when he promised to rehabilitate all our refineries.
2. Importation: Early last year, Buhari came up with a list of commodities that he forbids Nigeria from importing. Today, we still import those things and even more. Until we learn to produce what we consume, we'll never get out of debt. Today, Nigeria sell sugarcane to France and import sugar from them.
In 1957, Nigeria was the world’s largest palm oil exporter and was responsible for 43% of global palm oil production. Countries like Malaysia were coming to learn palm oil production from us. In 2018 Nigeria is an importer of palm oil, spending $500 million importing it from Asian countries including Malaysia.
3. Privatization: In the days of military rule, our past military presidents build world class industries like the Ajakota Steel company, Aluminum Smelter company etc. When these companies were functioning, Nigeria was exporting steel and aluminum to other countries. When they stopped functioning Nigeria choose to import steel and aluminum from other countries while those industries lies wasting. When democracy resurfaced in 1999, our leaders will keep promising us during campaigns for election that they'll rehabilitate those ailing industries only to end up selling them off through privatisation. Because of poor management, our leaders choose to sell off our assets that could have produced money for us and then rushed to borrow money from other countries just to spend. Until we start making money from our assets instead of selling them off, Nigeria will never stop borrowing.
For buhari in just 3 years to borrow more money than the entire PDP 16 years in power is not actually the problem, but the issue is: If for example he was using all these money to build new refineries or rehabilitate the old one, by now Nigeria would have been exporting petrol instead of importing. And the next leaders that succeed him would find it easier to pay back the loans. I am afraid but if buhari rules Nigeria again for another 4 years, it will come to a time that he'll be borrowing from Japan to pay the interest on the loan he took from China. This will happen when he finish selling all our assets.

Right now, we shouldn't think of how to pay back our debts, but we should focus on how to stop borrowing and increasing our debt. If can survive without borrowing money, then we can focus next on projects that will generate more income to the government, before we can be able to pay back our debts. In my own estimate, this might take us more than 30 years to achieve. And this means if we don't vote out buhari and restructure the country now, the future of our children and grandchildren is doomed.