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07.05.2007 General News

Aboadze sold but Government fights back

By myjoyonline

While the government has issued a statement announcing its intention to take over the total shares of the Aboadze Thermal Plant, The Chronicle has reported that CMS Energy, shareholders of the plant from whom government was to acquire the remaining shares for the total takeover, has perhaps outsmarted the government as it has already completed the sale of its interest in the plant.

Chronicle's checks on the website of CMS Energy revealed that the sale was completed last Wednesday, May 2.

The site indicated that CMS Energy had done away with ownership interests in its businesses in the Middle East, Africa, and India to the Abu Dhabi National Energy Company (TAQA) for $900 million, over a month ahead of the targeted date for closure of the deal.

The news on the completion of the sale, which was contained in a release titled: 'CMS ENERGY COMPLETES SALE OF BUSINESS INTERESTS IN THE MIDDLE EAST, AFRICA, AND INDIA,' states among others that "The CMS Generation portfolio also includes ownership interests in generation businesses in Morocco, Saudi Arabia, Ghana, and India.

The announcement of ongoing discussions on the transaction on February 2, this year, incurred the wrath of President John Kufuor, who chided the CMS boss, when the latter called on him at the Castle.

The President's fury was over charges that the energy company was negotiating to sell its stake in the plant without his knowledge. The president at the time also felt that if the negotiations for the sale had gone through it would have led to a 'stranger' being introduced into the Aboadze Thermal Power Project.

That announcement by CMS Energy, stated among others that 'other businesses included in the sale are CMS Energy's ownership interests in the Jorf Lasfar Energy Company in Morocco, the Jubail Energy Company in the Kingdom of Saudi Arabia, the Takoradi International Company (TICD) in Ghana and the ST CMS Company in Neyveli, India.'

It said however that the sale, which did not include the company's non-utility North American electric generating plants, was “subject to necessary consents, and the company is expected to close the sale in the middle of 2007,” at the same amount of $900 million.

Last Wednesday's announcement by CMS repeated aspects of the earlier one that, "proceeds from the sale of the company's CMS Generation subsidiary will be used to retire part of CMS Energy's parent company debt and for general corporate purposes, primarily investments in its Michigan utility, Consumers Energy.'

It continued that 'CMS Generation and TAQA's majority owner, the Abu Dhabi Water and Electricity Authority (ADWEA), are long-time partners. CMS Generation, in conjunction with ADWEA, developed, constructed, and operated the Al Taweelah A2 facility. Again in conjunction with ADWEA and International Power, they developed, constructed, and operated the Shuweihat S1 facility. The two major power and desalination projects are in the United Arab Emirates.'

Meanwhile, in what looks like a belated move, the Government of 'Ghana has announced that it is taking steps to take over the total shares of the Aboadze Thermal Plant.

A release last Saturday May 5, 2007 signed by Government Spokesperson on Finance & Economy, Mr. Kwaku Kwarteng, indicated that the "decision has largely been precipitated by the manner in which our partner in the Takoradi joint venture, CMS Energy, has sought to sell their shares in the venture to TAQA, ... without informing Ghana."

Government described as improper, the manner in which the transaction was being done "in complete disregard for our rights in the joint venture, which when concluded would have forced us to partner a company we do not know."

The statement said Government found no comfort in CMS belief that "our rights under the agreement remains intact, and that we have nothing to fear," adding that Government disagreed, since "For instance, it is entirely possible that TAQA, if they had bought the shares, would have on-sold those shares to Ghana,' continuing that 'The considerations of such a scenario would be different from those of Ghana buying the shares directly from CMS."

Consequently, Government said it had advised CMS to hive off the Takoradi plant from their take-over discussions with TAQA.'

According to the government, given the fact that electricity makes a critical and strategic input into our economy, it takes the matter serious.

The release concluded that "in the circumstances, we have been compelled to seek the purchase of the entire 100% of the shares in the Aboadze plant, and we are taking steps to make that happen.'

CMS Energy (NYSE:CMS) is a Michigan-based company that has as its primary business operations an electric and natural gas utility, natural gas pipeline systems, and independent power generation.

It owns 90% shares in the Takoradi International Company (TICO), the company that runs the Aboadze Thermal Plant, with the government of Ghana having 10%.