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The privatization of a public enterprise, in particular an unquoted enterprise, is a complex institutional re-organization, involving problems such as extent and form of past government assistance, livability of the enterprise when deprived of such government assistance, existing debt problems and/or other liabilities. Third party obligations and transactions constraints are other problems that need to be attended to. Issues ranging from stock asset valuation, corporate good standing and corporate documentation, the appropriate modalities for effecting ownership changes and encumbrances on total ownership by certain parties i.e. competitors, manner of share issue, listing on the stock market, legal evaluation and frame-work analysis, to the status of/and/or arrangement for company employees.
As a firm of professional advisor’s, solicitors have extremely critical, albeit complementary, roles to play in the hitch free implimentation of the privatization of an enterprise and will be responsibly for ensuring the preparation of the enterprise for privatization and ultimately effecting a successful sale thereof.
Pre-implimentation Assignment
- Ascertain legal ownership and equity structure of the enterprise.
- Assure by extensive due diligence the legal standing and structure of the enterprise as a viable corporate entity (review of all corporate documents and conduct necessary searches). Confirm due compliance with all statutory obligations.
- Conduct audit and verification of all assets held by the enterprise respectively and confirm ownership and perfection of title to the said assets.
- Review subsisting and/or outstanding contractual and other obligations (it is critical to assure that there exist no third party obligations that might affect the prompt privatization and liabilities).
- Confirm due diligence of the nature and status of the respective enterprises’ outstanding obligations and liabilities.
- Verify and review Trademarks, Licensing, Technical Service and Management Agreements (if any).
- Auditing of all assets held by individual companies and detect all charges fixed charges or floating or floating over such assets, confirm ownership and perfection of title.
Core Investment Participation
- Review information memorandum prepared by the financial advisors’.
- Review the company’s valuation process.
- Assist in the identification of possible strategic investor(s).
- Review and monitor the strategic investor(s).
- Assist (if requested) in negotiating with strategic investor(s).
- Prepare transaction documents (transfer, sale and shares or assets purchase, development, management services and technical assistance agreements) where necessary, and review same to ensure that the objectives of the NCP are attained while the welfare of the companies is safeguarded.
- >Assist the NCP in preparing the bidding documents and sale prospectus.
- Review and prepare Investment Protection or Government Support Agreements (if deemed necessary); (as support Agreement may be deemed necessary for the sugar companies as a result of the nature of their business).
- Assist and work with the NCP, and other firm members in ensuring that all stakeholders are effectively sensitized and accurately informed of processes.
- Assist in obtaining required approvals (where necessary).
- File compliance requirements and corporate documents at the CAC, NIPC and SEC.
Public Offer of Block of Shares
- Effect re-registration and conversion of the respective firms into public limited liability companies pursuant to the provisions of Section 50 of CAMA.
- Advise on compliance with all relevant laws at every stage of the transaction.
- Examine the companies respective Memorandum and Articles of Association to ensure that the same are properly drafted and are appropriate for the post-privatization structure of the companies and that the provisions thereof do not conflict with any of the provisions of CAMA. (We assume that the companies were incorporated pre-CAMA, their documents may not have been reviewed since CAMA was promulgated in 1990).
- Cause to be passed all the necessary company resolutions required to effect the transaction.
- Review all transaction documents, in particular, the public offer documents i.e. the prospectus and the abridged prospectus, necessary compliance with specified legal and regulatory provisions.
- Prepare the vending Agreements.
- Review all material contracts and material litigation in which the companies are involved.
- Attend all meetings (viz. All Parties Meetings and the Completion Board Meetings). Assure due process in the conduct of Completion Board Meetings and ensure that all the transaction documents are signed by the parties to the Offers.
- Ensure that the companies shares are duly listed on the Stock Exchange and ensure compliance with the respective Stock Exchanges’ listing requirements.
- Assist foreign legal advisers in preparing the enterprise for cross-border listings.
- Liaise with regulatory agencies.
- Liaise with and advise all other parties to the transaction.
- Register all statutorily prescribed documents and the companies resolutions and statutory forms with the Corporate Affairs Commission, as and when appropriate.
- Work with others, such as the NCP in articulating the basis of allotment of shares, following the closing of the offers.
- Assure compliance with post offer requirements, including prescribed allotment modalities and SEC approval thereof.
- Ensure that particulars of new shareholders are registered in the respective companies register of shareholders.
It is expected that a portion of the Federal Governments shareholding in the sugar companies may be offered for sale to the Nigerian public pursuant to the Stock Exchange Public Offer of Securities Act, 1999 and the companies and Allied Matters Act (CAMA), 1990. The process is also guided by the regulations of the Securities and Exchange Commission and the Stock Exchange Listing requirements.
At this stage of the transaction, our role as solicitors would, primarily be to work with other NCP advisers to prepare offer documents of sale and ensure due compliance of the transaction process with specified legal and regulatory requirements.
Our duties as solicitors would include the following:
Pursuant to the determined privatization strategy of the NCP,functions 2 and 3 can be effected simultaniously. The functions up to the close of the public offer of the respective companies shares can be completed within six (6) weeks if all the required information and accounts are readily available, and the companies existing management co-operate fully and there are no SEC or Stock Exchange approval delays.
Temple Chambers (Barristers & Solicitors) is a firm of Barristers and Solicitors specializing in domestic and international, commercial and business law matters.
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