The Asset Management Corporation of Nigeria has invited prospective investors to submit Expressions of Interest for the acquisition of its stake in PAN Nigeria Limited.
PAN, formerly Peugeot Automobile Nigeria Limited, is a joint venture between the Federal Government and Peugeot, the major French automaker, with Peugeot Citroen as the technical partner to the assembly plant. The company currently has capacity to assemble 240 cars a day, according to information on its website. Its annual production capacity in the 1980s was 90,000 cars.
In a publication on Tuesday, AMCON said it owned 79.31 per cent of the share capital of PAN, having acquired the stake four years ago after purchasing the company’s debt and taking some as equity.
Reuters reported that its operations nosedived and the company accumulated bad loans shortly after the government sold its stake via a privatisation arrangement to local core investors in 2006.
AMCON said PAN Nigeria had assets totalling N24.96bn as of December 2014 and equity of N11.98bn, and was seeking investors with experience in automobile manufacturing to buy the stake on offer.
According to the bad debt manager, the bids for the EoI will close on January 26.
President Muhammadu Buhari is keen to promote a ‘Made-in-Nigeria’ industrial policy. In November, he met Peugeot’s Executive Vice President for Africa and the Middle-East, Jean-Christophe Quemard, to discuss the revival of local production.
The government under a National Automotive Industry Development Plan has ordered local car distributors to come up with plans for new assembly plants, along with threats of imposing prohibitive import duties.
United States carmaker, Ford Motor Corporation’s partnership with a local car dealer, built its first model in Nigeria at a new assembly plant in November last year and said it would produce an initial 10 vehicles a day for the domestic market.
The auto market in Africa’s biggest economy has huge potential but only a small number of new vehicles are sold annually because the sector is dominated by imported used vehicles, and the absence of an industrial policy that would encourage suppliers to set up in Nigeria has stunted growth.
AMCON was set up to absorb bad loans from banks after a $4bn bailout in 2009 rescued nine lenders from collapse. AMCON then bought bad loans at a discount in exchange for government-backed bonds and has since been selling off collaterals against those loans to pay bondholders.
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