Thursday, January 23, 2014

Cameroon gives go-ahead to AES to sell its assets to British fund, Actis

(Business in Cameroon) - Authorised sources have revealed that the Cameroonian government has given the go-ahead for American group, AES to sell all its assets in Cameroon’s energy sector to the British investment fund, Actis. 

On November 7, 2013, AES and Actis announced that they had come to an agreement for the sale of all of AES’ assets in its Cameroonian subsidiaries (AES-Sonel, Kribi Power Development Corporation (KPDC) and Dibamba Power Development Corporation (DPDC), for a total of 220 million dollars (110 billion FCfa).
But, according to the public electrical service concession contract signed in 2001 between Cameroon and AES, any sale of assets by AES must be approved by the Cameroonian government by way of a non-objection opinion. The concession contract gives the State the possibility to oppose the transaction between AES and Actis, in which case, it would purchase the assets itself to sell them to another company of its choosing. 

Six months of suspense and speculation
The Cameroonian entity, which had a contractual deadline of 90 days to accept or reject the deal that was officially reported to it on July 26, 2013, had to wait almost six months before giving its approval. Certain pieces of information led some to speculate that the deal would be opposed in favour of Electricité de France (Edf), which, pending government approval, already had its eyes on AES assets in Cameroon.
While speculation was brewing about the sale of AES assets, Actis announced on December 9, 2013 that it had closed its third energy investment fund, Actis Energy 3, after raising 1.15 billion dollars (around 575 billion FCfa), surpassing the desired amount by 50%. A part of this fund will be used to finance the acquisition of shares in AES Corporation in Cameroon once government approval has been obtained.

Working calmly
So far, government notification allowing AES to sell its assets in the three Cameroonian subsidiaries has provoked no response from employees of these companies, especially AES Sonel, the electricity sector leader in Cameroon. According to sources contacted at AES, “everyone is working calmly.” 

Electricity sector union members who protested the day after the announcement was made about AES assets being sold to Actis, are also calm. Yet, last November, union members demanded the handing over of their 5% share of AES Sonel before the conclusion of the AES-Actis deal. If this request is met, 51% of AES Sonel’s capital will be sold to Actis instead of the previously expected 56%.
Brice R. Mbodiam

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