The High Court of Nigeria invalidated a deal last Friday in which Russia's RusAl, the world's largest aluminum producer, bought a local aluminum enterprise five years ago, Nigeria's The Nation Newspaper reported on Monday.
RusAl bought 77.5 percent of Alscon (Aluminum Smelter Company of Nigeria) in 2007 for $250 million, later increased its stake to 85 percent, and overhauled the plant in 2008 after it had spent eight years inactive. The Alscon enterprise, which includes a 120,000 ton capacity aluminum plant, gas-fired power station and a port, is one of RusAl's core assets in Africa.
The paper said the court ruled on Friday that rival bidder U.S. Bancorp Financial Investment Group (BFI) had a valid contract with Alscon or Aluminum Smelter Company of Nigeria for a more profitable proposal to buy the plant than RusAl's.
BFI Group emerged as the preferred bidder for ALSCON in 2004, but was later disqualified by Nigeria's Bureau of Public Enterprise.
In 2009 Nigeria's Senate initiated an investigation into state property sales and said the 77.5 percent stake bought by RusAl was worth $3.2 billion but the Russian company had paid only $130 million for it. In December 2011 the Senate voted to abolish the sale of 12 state companies including Alscon, because their privatization scheme was "illegal".
RusAl told Prime news agency the company had not yet received any notification of the court's decisions.
"We will be able to make further announcements as soon as we examine the decision of the High Court of Nigeria. As for now, Alscon is part of RusAl and the plant is operating normally," RusAl said.
MEF-Audit chief analyst Alexander Pobedash told Kommersant business daily the potential loss of Alscon would not cause major problems for RusAl in current market conditions as aluminum producers are cutting production capacity, but the court decision might prompt suits against RusAl from other African states where the company has assets.
