The National Council on Privatisation, NCP, yesterday set up Transition Committees for the 15 Power Holding Company of Nigeria, PHCN successor companies whose preferred bidders recently paid the mandatory 25 percent of their bid values.
The move is in a bid to, amongst others, facilitate the smooth transition and eventual handover of the management and operational control of the successor companies to their new owners.
The Chairman, Technical Committee of the NCP, Mr. Atedo Peterside, was quoted as saying in a statement that the inauguration of the committees is in compliance with the Share Sale Purchase Agreement, SSPA approved by the Council.
The statement, issued by the Bureau of Public Enterprises, BPE, also quoted the Acting Director- General, Mr. Benjamin Ezra Dikki, as saying that each successor company had a three-member committee.
The members include representatives of the BPE, the management of the successor company and the preferred bidder. The BPE nominee is the chairman of each committee.
According to Dikki, “Both BPE and the new owners have a mutual interest in ensuring that the companies operate in such a way as to maintain the value of the company during the transition period.”
He added that the transition period could last for a month or a maximum of six months depending on full payment by the new owners.
Also, he noted that the transitional arrangements will create a platform to ensure that both the companies and purchasers are ready for the handover process.
He emphasised that the managements and boards of the successor companies will continue to exercise their functions during the transition period without interference from the transitional committees.
The terms of reference for the transition committees also include to:
· Allow purchasers access to the companies in order to prepare for the implementation of their business plans laid out in the proposals submitted to the Bureau of Public Enterprises;
· Provide a forum for purchasers to engage with existing management and employees to ensure a smooth transition and handover; and
· Allow BPE and the purchasers to monitor the on-going operations of the company to ensure they are operating in an efficient manner and in compliance with the terms of the Share Sale Agreements.
It would be recalled that Share Sale Agreements were executed between the preferred bidders and BPE on February 21, 2013.