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Plant Pool shows interest in STC

Mr Lolu Akindele - MD, JA Plant PoolThe J A Plant Pool says it will bid for the state-owed Intercity STC Coaches Limited should government finalise plans to privatise it.
Plant Pool, which distributes Chinese-made Yutong buses and other vehicles in the country, said the current state of STC, especially its infrastructure base, made it a viable venture hence the resolve to buy it should the opportunity arise.


"We are still waiting for government to say if it will diversify STC. If that decision is finally taken, we will just express interest in it," the Managing Director of J A Plant Pool, Mr Lolu Akindele, said in an interview.

The Social Security and National Insurance Trust (SSNIT), which owns 80 per cent of STC, has long said it wants to offload its stake should government, the 20 per cent shareholder, give it the go ahead.

Speaking to the GRAPHIC BUSINESS on Plant’s Pool’s intentions towards STC, Mr Akindele said his outfit believed it had what it took to efficiently operate a transport company like STC and would, thus, express interest in it when the time is due.

“In fact, there is actually no reason why STC should not perform well because it has the entire infrastructure. All that it needs now is working capital, buses and good management and we can provide all those things," Mr Akindele said.

Plant Pool had long supported STC with some buses to augment its fleet, especially at a time when it was nearly grounded on the basis of operating with rickety buses.

The Managing Director of STC, Mr Charles Thompson, said in a separate interview that his outfit was actually not bothered with who takes over the company except that the motive of the new investor must be of priority when the privatisation time is due.

“Who buys STC should really not be an issue but what is informing that acquisition is key. Some may just be interested in the money and not the future prospects of the company and I think that should be key,” he told the GRAPHIC BUSINESS.

The ownership of STC, which operates passenger and parcel delivery services as well as offers training courses for drivers, has moved from public to private and now back to the public chest within the last decade.

The company was first sold to Vanef Consortium Limited in 1998 in a divestiture initiative that saw 80 per cent of its stake going to the private investor.

It was, however, returned to the Social Security and National Insurance Trust (SSNIT) – a public institution – in 2003 following the inability of Vanef to meet the financial requirements governing the divestiture.

Since then, its image and finances have continually declined as SSNIT, the new owners, reportedly fail to invest in it.

That lack of working capital for expansion and the acquisition and servicing of new buses caused STC to survive on loans from its bankers.

But, for the timely intervention of its owners, the company would have been auctioned late last year to defray a US$3.8 million owed the Prudential Bank.

The attempted auction reignited concerns on the government’s position on the company.   

"We have always maintained that government has no business in business. Rather, it should create the enabling environment for private people to operate,” Plant Pool’s MD said, citing private sector transport companies as testimonies.

“Private companies that do the same thing that STC does are doing well. Why can’t STC also do well,” he asked.

It is, however, not clear if the government will privatise the company soon but should it do, Plant Pool, a member of the Jospong Group of Companies, will be expected to face stiff competition from other private investors.

Story: Maxwell Adombilla /Graphic Business

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