The Nigerian Minister of Power, Professor Chinedu Nebo, says power companies can approach the capital market to raise substantial funds to support growth despite an earlier agreement stopping them from doing so.
The Minister made the comment on Friday at the Nigerian Stock Exchange, where he rang the closing bell.
In an agreement between the Nigerian government and the power companies, during the unbundling of the Power Holding Company of Nigeria, the companies are not expected to approach the capital market for fund raising until after five years of purchasing the asset of the PHCN from the government.
The companies have been facing financial issues since the purchase of the assets and the Minister’s statement has opened the possibilities that the companies may soon approach the capital market to raise needed funds in order to develop the power sector.
Not Cast In Stone
Professor Nebo explained that the reason the new power companies might need the capital market despite the restrictions on listing within the first five years, was because of the needed development in the sector, which is expected to be rapid.
He said: “The capital market is one veritable means of getting funds for these new power companies that bought the assets of the Federal Government of Nigeria under the former Power Holding Company of Nigeria and those that are burying the assets of the NIPP project.
“The capital market will enable them to bridge the financial gap that and help them to realise, consolidate what they have acquired and grow it substantially.
“There was a clause in the agreement between the Federal Government and the companies that bought the assets that they will not list until after five years because the government wants to be sure that only serious minded people buy the assets but the agreement is not cast in stone”.
The Minister said that the companies could raise an alarm that they needed to be supported by the capital market in order to get much better affordable financing to meet their goals.
On this edition of Law Weekly, we found out that the issue of dispute resolution in the Nigerian Capital Market is still one issue still on the minds of lawyers, judges, lawmakers, accountants, stockbrokers and other members of the capital market.
Another issue we featured was the suspension of the former president of the court of appeal, Justice Ayo Salami who is due to retire from the bench on the 15th of October.
Justice Salami spoke about the intrigues that led to his suspension during a book launch in his honour by the Ilorin branch of the Nigerian Bar Association.
The book is titled: “Nigerian Judiciary: Contemporary Issues on Administration of Justice”.
Justice Salami was suspended by the National Judicial Council in August 2011 for refusing to apologise to the council and the former Chief Justice of Nigeria, Justice Aloysius Katsina-Alu, after a face-off between both men.