AMCON seeks EOI for stake in PAN Nigeria.

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Peugeot may have finalised plans to revive its subsidiary in the country, PAN Nigeria Ltd as Asset Management Corporation of Nigeria (AMCON) is now ready to sell its stake in the automobile firms which fortunes have nosedived through bad loans.

AMCON which currently owns 79.31 percent of PAN having acquired the stake four years ago after purchasing the company’s debt has invited prospective investors to submit Expressions of Interest (EOI) for the acquisition of its stake in the moribund automotive company.

The request for EOI closes January 26.

PAN, formerly Peugeot Automobile Nigeria Limited, until its privatisation in 2006 is a joint venture between the Federal Government and Peugeot, the major French automaker, with Peugeot Citroen as the technical partner to the assembly plant. The company currently has capacity to assemble 240 cars a day, according to information on its website. Its annual production capacity in the 1980s was 90,000 cars.

Federal government though sold its stake in Peugeot Automobiles Nigeria Limited when it was privatised nine years ago back but the company had technically reverted to government ownership with up to 85 per cent of its shares now held by the Federal Government and the Assets Management Corporation of Nigeria

The company was forced into difficult position when its lost the monopoly of government businesses to other brands like Toyota, causing its operations to nosedive and accumulating  bad loans.

PAN Nigeria, according to AMCON had total assets of N24.96billion as of December 2014 and equity of N11.98billion, in which it was seeking investors with experience in automobile manufacturing to buy the stake on offer.

President Muhammadu Buhari who is willing to promote a ‘Made-in-Nigeria’ industrial policy in the country, had in November last year met Peugeot’s Executive Vice President for Africa and the Middle-East, Jean-Christophe Quemard, to discuss the revival of local production.

Quemard at the meeting told President Buhari that Peugeot was ready to reinvest in vehicle assembly in Nigeria, “provided that the right indigenous partners are found”.

He also hinted of the company’s three-phased plan to resume vehicle assembly in Nigeria this year. The company intends to start with 4,000 cars, rising up to 10,000 cars by 2021.

The government under a National Automotive Industry Development Plan which dwells on domestication, has ordered local car distributors to come up with plans for new assembly plants, along with threats of imposing prohibitive import duties.

United States carmaker, Ford Motor Corporation’s partnership with a local car dealer, built its first model in Nigeria at a new assembly plant in November last year and said it would produce an initial 10 vehicles a day for the domestic market.

Toyota, Honda amongst others have also embraced the domestication policy and are moving in this direction having acquired lands with arrangement in advance stages.

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.

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