The Nigerian Government is mulling the option of divesting 20 percent of its holdings in privatized companies listed on the country’s bourse.
“The BPE is working with core investors in certain privatised enterprises sold by deferred public offering to ensure that they sell at least 20 percent of such entities to the market via public listing,” said Mr. Alex Okoh, the Director-General of the Bureau of Public Enterprise (BPE).
The BPE is a public agency that manages privatization processes on behalf of the government and manages the government’s interests in private and public companies.
The planned divestment, which is expected to focus largely on the country’s interests in the petrochemical sector, is to allow private individuals own a stake in some of these formerly-public firms.
Mr. Okoh confirmed that the agency was working closely with the capital market regulators The Securities and Exchange Commission (SEC) to fine-tune modalities for privatized firms in key economic sectors to list on the country’s stock exchange. He, however, failed to mention which sectors the government was looking towards to persuade operating firms to initiate IPOs.
This led to speculations that the government would turn its attention towards the power sector to implement such an initiative, given how unproductive the highly publicized privatization of the country’s power generation and distribution assets has been so far.
The Federal Government holds a 40 percent stake in all electricity distribution companies (DIScos) and some generation companies (GENcos).
But Mr. Okoh quelled such rumours, explaining that getting investors attracted to a poor-performing sector would prove almost an impossibility at this time.