By Ola Adeola
Nigerian government plans to sell 5 per cent of its 49 per cent equity in the Nigerian Liquefied Natural Gas company, according to the PUNCH. An unnamed official, in the report, said the sale and other proposed divestment by the government aims at raising about between $10bn and $15bn which would be injected into the cash-strapped economy.
“The Federal Government is open to the possibility of selling down its 49 per cent ownership by five per cent or thereabouts”, the official reportedly said.
The report adds that the sale will have a clause that allows the government to buy back the sold equity share anytime it financial profile changes. The report contradicts beliefs the government plans to sell the NLNG.
Moreover, some of the assets would reportedly be sold through the Nigerian Stock Exchange.
Again, quoting the official, the report says “Some of the intended sales could be in form of time-bound leases, advance renewal payments on leasing licences and concessions, which will attract buoyant signature fees.
“If we even want to sell certain assets, while our target is to get foreign currencies, specifically dollars, the option will also be opened to Nigerians at some point to buy limited shares through the Nigerian Stock Exchange.”
Hinting a concession deal is almost completed, the official states further that the government is “entering into some concessions like that of the East-West lines of the Nigerian Railways. General Electric will be the concessionaire, and for which the global giant will invest $2bn in the Nigerian economy, including for the refurbishment of the single-gauge lane of the lines that have been largely left idle for years.
“GE, under the deal, is expected to hire back some of the laid-off staff of the Nigerian Railway Corporation, and also open a Transport University in Nigeria, while building and assembling train coaches here in Nigeria.
“Under the deal, the government will also receive signature fees in foreign currencies as it would in other assets that will be subjected to concession.
“The important thing to keep in mind is that the sale of some of the assets is an option to raise the much needed dollars at a critical time for the Nigerian economy.
Nigerian economy is currently on a low as monthly foreign currency earnings dips to as low as about oscillates between $300m or a little more in some months this year.