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Nigeria Offers Rusal’s Smelter to BFI Group After Ruling

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Jan. 31 (Bloomberg) -- Nigeria offered to sell Aluminum Smelter Co. of Nigeria to Bancorp Financial Investment Group after the country’s Supreme Court ruled last year that an earlier decision to cancel the transaction was invalid.

“This development follows the directive of the National Council on Privatization,” Chukwuma Nwokoh, a spokesman for the Bureau of Public Enterprises, said in an e-mailed statement. Bancorp “is expected to execute the share-purchase agreement.”

A sale of the smelter, known as Alscon, would shift ownership from Russia’s United Co. Rusal, which bought a 77.5 percent stake in 2007 for $160 million, court filings show. Bancorp said it had already offered $410 million for the plant, which is based in Ikot Abasi in the southeastern state of Akwa Ibom, and that it had been selected as the preferred bidder.

The Supreme Court ruled last July that the privatization agency didn’t have the right to cancel the sale to Bancorp, a U.S. company with a unit based in Lagos, Nigeria.

Bancorp Financial is “very pleased” with the decision of the privatization council, Reuben Jaja, the company’s president, said by phone from Lagos, the commercial capital. “We will now take time to look at the share-purchase agreement and make sure it's pursuant to the order of the Supreme Court.”

Lost Ownership

The Bureau of Public Enterprises expects Bancorp to pay 10 percent of the $410 million offer price within 15 days of the execution of the share-purchase accord, Nwokoh said yesterday.

Rusal said Nov. 5 it was seeking arbitration in London over ownership of the smelter and wanted a ruling blocking the court judgment or damages in the event of lost ownership. It has estimated its investment in the facility at $500 million.

“Rusal is a legal owner and a good-faith owner of Alscon,” the Moscow-based company said today in an e-mailed statement. Rusal has filed a petition to a California court asking it to make Bancorp disclose information on the privatization process and expects a decision as soon as next month, it said.

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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