RUSAL, Russian Aluminum giant and operator of the Aluminum Smelter Company of Nigeria (ALSCON) stands the risk of incurring a financial loss of about $500m if a recent Supreme Court judgement declaring Bancorp Financial Group BFI as preferred bidder for ALSCON, Ikot Abasi Akwa Ibom State is implemented.
In the course of the bid in 2004, BFI Group was declared preferred bidder with a total offer of $410m but was disqualified by the Bureau of Public Enterprise (BPE) for failing to pay the stipulated 10 per cent of its proposed bid price. Two years later, United Company RUSAL (UC RUSAL) bought over ALSCON as highest bidder.
This action led to BFI Group dragging BPE and RUSAL to court with the Supreme Court ruling in their favour. Sources in ALSCON told The Guardian: “For Nigeria, consequences of implementation of the Supreme Court ruling could be unpredictable.
“But in the event that RUSAL’s ownership of ALSCON is disputed, RUSAL is likely to submit this issue to the International Arbitrary Court. This major corporation will use all legal means available to protect its interests in court and get compensation.
“In this case, Nigeria will be bound by the decision of international arbitration. What this decision will be at present is not possible to forecast but in any case, the large international corporation, RUSAL, will certainly protect its interests and strive for compensation of possible financial damage which could amount to $500m.”
Sources at the company further revealed: “Akwa Ibom State can also appear to be a loser financially, as employees of ALSCON pay personal income tax to the budget of Akwa Ibom. In the case of reduction of the number of employees or even mothballing of the plant, the Akwa Ibom budget can lose this payment and ALSCON staff might also feel negative aftermath of possible ownership changing. At present about 760 employees work at the plant and receive their salaries. Their work places might be jeopardised and in addition, members of their families might lose free medical care provided by the plant.”
The Guardian further gathered that since RUSAL took over, despite adverse trend in the global aluminum market, it has rehabilitated the plant, which was idle for a long period.
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