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Nigerian Senate Votes to End Deals With Rusal, Global Steel

Dec. 21 (Bloomberg) -- Nigeria’s Senate voted for the cancellation of the sale of 12 state-owned companies, including an aluminum smelter sold to United Co. Rusal Plc of Russia and a steel company bought by Global Steel Holdings Ltd. of India.

The process of privatizing the companies “was marred by political interference and injustice,” according to a Senate investigative report approved by lawmakers yesterday in Abuja, the capital. “There was inadequate transparency and failure to comply with the privatization procedure.”

The lawmakers want the affected companies to be “re-advertised for sale. President Goodluck Jonathan must endorse the decision for it to take effect.

Rusal, the world’s largest aluminum producer, bought a 77.5 percent stake in the Aluminum Smelter Co. of Nigeria, or Alscon, based in Ikot Abasi in the southeastern state of Akwa Ibom, in 2007. Pramod Mittal’s Global Steel Holdings bought 80 percent of the 1 million-ton capacity Delta Steel Co. Ltd. in 2005. The plant is located in the southern city of Warri.

Rusal today expressed its “surprise at the position of the Senate of Nigeria.” The privatization process for Alscon was “in accordance with the international and Nigerian laws and the privatization guidelines” of the Nigerian government, the Moscow-based company said in an e-mailed statement. A call to Global Steel Holdings’ Nigerian unit, Delta Steel, was not answered.

Some of the other deals affected by the Senate’s vote include the sale of the Hilton hotel to Transnational Corp. of Nigeria Plc and the Sheraton Hotel and Towers to Hans Gremlin Nigeria Ltd. The investors failed “to deliver on fundamental provisions of the share purchase agreements and post-acquisition plans,”

The lawmakers also want the government to fire Bolanle Onagoruwa, head of the Bureau of Public Enterprises, the privatization agency. The agency won’t comment on the decision, Chukwuma Nwokoh, a spokesman, said by phone today from Abuja.

To contact the reporter on this story: Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net

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