The Asset Management Corporation of Nigeria has disclosed its intention to sell its stakes in Peugeot Automobile of Nigeria Limited (PAN) to investors with experience in automobile manufacturing.
AMCON in a statement said it acquired 79.3 per cent stakes in PAN’s total assets of N24.96 billion with equity of N11.98 billion four years ago after purchasing the company’s debt and taking some as equity.
It said it has already sent out notice seeking bids from investors that are interested in the shares. The bids, the statement stated will close on January 26th at 4pm.
PAN Nigeria Limited was set up in 1972 as a joint venture between the Nigeria government and the French automobile car company, with an annual production of 90,000 cars by the 1980s. But operations nosedived and the company accumulated bad loans shortly after the government sold its stake via a privatization to local core investors in 2006.
PAN got a new lease of life by keying into the Federal Government’s plans to revive local production of vehicles when it introduced the new National Automotive Policy in 2013 that gave incentives to local manufacturers of vehicles. Peugeot Citroen is the technical partner to the Nigerian assembly plant, which has capacity to assemble 240 cars a day.
The auto market in Africa’s biggest economy has huge potential but only a small number of new vehicles are sold annually because the sector is dominated by imported used vehicles, and the absence of an industrial policy that would encourage suppliers to set up in Nigeria has stunted growth.
AMCON was set up to absorb bad loans from banks after a $4 billion bailout in 2009 rescued nine lenders from collapse. AMCON then bought bad loans at a discount in exchange for government-backed bonds and has since been selling off collaterals against those loans to pay bondholders.
President Muhammadu Buhari who is keen to promote a “Made in Nigeria” industrial policy, had November, 2015 met with Peugeot’s Executive Vice President for Africa and the Middle-East, Jean-Christophe Quemard, to discuss the revival of local production.