CEC: Acquisition Of Abuja Electricity Distribution Company, Nigeria
KANN Utility Company Limited, a 50% joint venture of the Copperbelt Energy Corporation PLC (CEC) has signed a Sale and Purchase Agreement to acquire a 60% interest in the Abuja Electricity Distribution Company (‘AEDC’).
The agreement was signed in the Nigerian capital, Abuja, on Thursday 21st February, between KANN Utility Company Limited, the Bureau of Public Enterprises and the Ministry of Finance of Nigeria.
KANN, comprising CEC PLC and XerXes Global Investments as the other joint venture partner, was confirmed as preferred bidder to acquire AEDC in November 2012 following a rigorous international bidding process that commenced with the submission of an Expression of Interest in March 2011, and submission of a bid on 31st July 2012. CEC PLC will be the Operator of AEDC.
AEDC has a franchise for distributing electricity in four states, comprising the Federal Capital Territory of Abuja, Niger State, Kogi State and Nasarawa State. Serving 133,014sq km with a population of 10.5 million people in 2.3 million households, the AEDC covers a relatively lightly populated area dominated by the Federal Capital. It has around 600,000 customers and an average electrification rate of 27%. Approximately 3,000 people are employed by AEDC.
AEDC purchases power from the Nigeria Bulk Electricity Trading PLC (the ‘Bulk Trader’) and is connected to various power generation plants by the Transmission Company of Nigeria.
The consideration payable for the 60% interest in AEDC is US$164 million, out of which 25% (US$41 million) is payable within 15 days of signing the Agreement, with the balance of 75% (US$123 million) payable after six months.
The financing plan for the acquisition has been developed with Standard Bank of South Africa, and it is intended to finance the acquisition with a combination of debt and equity. The transaction is expected to be finalised and shares transferred when the final payment is made (anticipated August 2013). During the interim period, preparations will be made to take over the management of AEDC.
The Board of CEC commends the Federal Government of Nigeria for the determination it has demonstrated in reforming the power sector in Nigeria, which will certainly significantly address the need for increased investment, higher efficiency and improved customer service to consumers in Nigeria.
The principal advisors to CEC PLC and KANN for this transaction are Standard Bank of South Africa (financial), Norton Rose of the United Kingdom (international legal), Detail Commercial Solicitors (Nigerian legal) and Aurecon (technical).
About KANN Utility Company Limited
The joint venture comprises CEC PLC and XerXes Global Investments, an investment company registered in Abuja. CEC has formed a subsidiary company called CEC Africa Investments Limited (‘CEC Africa’) registered in Mauritius to undertake international investments in the power sector in Sub-Saharan Africa. CEC Africa is the immediate shareholder in KANN.
For further information, please contact the following persons:
+260 212 244914
Clara M Musama
+260 212 244916
Date: February 26, 2013