LAGOS (Reuters) -- Nigeria's state-backed bank Asset Management Corporation of Nigeria (AMCON) said it plans to sell its majority stake in Peugeot Automobile Nigeria (PAN) Limited, PSA/Peugeot-Citroen’s local joint venture, and is seeking bids from investors.
PSA’s plant in Kaduna assembles Peugeot models including the 301 and 508 from complete knockdown kits and has the capacity to assemble up to 240 cars a day.
PAN was established in 1972 as a joint venture between the Nigerian government and PSA. But operations deteriorated and the company accumulated bad loans shortly after the government sold its stake via a privatization to local core investors in 2006.
In a statement, AMCON said it owned 79.3 percent of PAN, having acquired the stake four years ago after purchasing the company's debt and taking some as equity.
AMCON said PAN Nigeria had assets totaling 24.96 billion naira ($125.43 million) as of December 2014 and equity of 11.98 billion naira, and was seeking investors with experience in automobile manufacturing to buy the stake on offer. Bids will close on Jan. 26, the bank said.
Made in Nigeria
The country’s President Muhammadu Buhari is keen to promote a "Made in Nigeria" industrial policy. In November, he met PSA's executive vice president for Africa and the Middle-East, Jean-Christophe Quemard, to discuss the revival of local production.
The government under a National Automotive Industry Development Plan has ordered local car distributors to come up with plans for new assembly plants, along with threats of imposing prohibitive import duties.
Ford Motor began production with a local car dealer at a new assembly plant in November and the automaker says it will produce an initial 10 vehicles a day for the domestic market.
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. The absence of an industrial policy that would encourage suppliers to set up in Nigeria has also stunted growth.
AMCON was set up to absorb bad loans from banks after a $4 billion bailout in 2009 rescued nine lenders from collapse.