Africa’s richest man, Alhaji Aliyu Dangote, has submitted a bid for part ownership of Peugeot Automobile Nigeria. As disclosed on Thursday by Kano State governor, Nasir El-Rufai, Dangote’s bid was made jointly with two Northern States’ (Kaduna and Kebbi) as well as Bank of Industries.
According to governor El-Rufai, Dangote, and co-bidders are asking for a majority stake in the PAN, which AMCON, Nigeria’s state-backed “bad bank”, put up for sale recently.
“We have submitted bids for the carmaker, with Aliko Dangote on board together with BoI, Kebbi and Kaduna State,” said El-Rufai at a conference. “We are confident our bid will sail through.”
PAN Automobile, originally a local joint venture between Nigerian government the French automaker, Peugeot-Citreon, was established in Nigeria in 1972 with a capacity to assemble 240 cars a day. It recorded initial success, producing close to 100,000 vehicles per annum in the 1980s.
Like other assemblers in Nigeria, the company ran into problems, no thanks to Nigerian government’s import policy, which allowed unfair competition from cheaper imported Fully Built Up (FBU) vehicles from Asia. The likes of Volkswagen Nigeria closed down, only to be revived recently by Stallion Group. PAN continued to survive for some years mainly on government patronage.
The company’s situation got worse, following sale of federal government’s stake to local investors in 2006, amidst unrestricted importation of used vehicles popularly known as Tokunbo into Nigeria. Result was that Peugeot Nigeria got drowned in debt and had to be rescued by Asset Management Corporation of Nigeria (AMCON), the state-owned “bad bank”, which bought back the company’s debt and took 79.3 percent equity.
AMCON placed its equity in PAN for sale recently. Although the sales bid reportedly closed since January, it was only last week that major bidders, including Alhaji Dangote, got revealed.
Once the deal announced last week scales through, PAN Automobile Nigeria Limited will be in a vantage position to take advantage of the federal government’s automotive policy, which has attracted several assembly plants into the country. For instance, Kia, Volkswagen, Nissan, Hyundai and Ford commenced operation last year. Last week, Toyota Nigeria Limited also announced official at its Annual Awards night held in Lagos that its assembly plant is ready.