Barely a year after it bought a 20 percent stake in Energy Fiji Ltd (EFL), the Fiji National Provident Fund (FNPF) is in the process of selling it.
While details have yet to be announced, Islands Business has been reliably informed that the divestment by FNPF was a condition in the initial purchase agreement when the pension fund bought the shares from the Fiji Government in August 2019.
“It was always understood that FNPF will hold on to the shares until the Government finds a strategic partner to buy the 44 percent, in which case FNPF will sell its holding, as per the sale agreement” Islands Business was told.
Whether the FNPF will recover the $206.1 million it forked out for the 20 percent stake in EFL stakes – as disclosed in the 2019 EFL Annual Report – is not known, but Islands Business has been told that talks on the divestment have concluded and that a statement will be issued soon.
In an interview with state-owned radio FBC news last week, Fiji’s Minister for Economy Aiyaz Sayed-Khaiyum said negotiations had begun between EFL and an investor experienced in the energy sector for the divestment of the 44 percent stake in EFL.
“We are very excited about this one particular company that brings a lot of international savvy, international expertise and they have the ability to attract international capital to this particular divestment process and should they cross the line and we have this divestment in place then we think that EFL will be very much complimented by this new partnership,” Sayed-Khaiyum told FBC.
Power production in Fiji is an open market but EFL, as a fully government-owned company, holds the monopoly license for retail power sale and distribution.
The Fijian Government has been trying to divest 44 percent of the company since 2015, but its earlier efforts have been unsuccessful.
A flash regulatory reform in 2017 produced the updated Fiji Electricity Act 2017 and paved the way for a 20 percent sell-off to FNPF after calls for Expressions of Interest failed to attract buyers.
Five percent, deemed non-voting shares, were offered for free to current and future EFL customers, while 75 percent was retained by the Government as it continued its search for potential buyers.
Upon completion of this latest round of divestment, the new ownership structure of EFL is likely to be: Fiji Government (51%), EFL customers (5%), and the new partner (44%).
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