Nitel: FG Weighs Options
- By Simeon Ogoegbulem
- Published January 17th, 2011
- News
- Unrated
The federal government is considering options to embark on the offloading of the Nigeria Telecommunications (Nitel) Plc. The move by government follows the inability of New Generation Consortium, the preferred bidder in the Nitel transaction to meet the December 23 deadline given to it to pay the 30 per cent bid bond, amounting to $750million.
New Generation had in February last year, emerged the preferred bidder in the Nitel financial and technical bid opening. President Goodluck Jonathan in October approved its bid to pay $2.5 billion for Nitel and its mobile subsidiary, Nigerian Mobile Telecommunications Limited.
It was followed in the Nitel bid by Omen International, which emerged the reserved bidder with $956 million, while Brymedia emerged third with $550 million. Other contenders for the acquisition of 75 per cent of Nitel and its M-Tel subsidiary included AFZI/Spectrum Consortium with a bid of $375.5 million and MTN Nigeria Communications Limited, which offered $25 million for SAT-3 only.
The consortium has since November been asking for extension to enable it mobilize the funds. The Bureau of Public Enterprises (BPE) had given the consortium a final extension which elapsed last December. The consortium had blamed its inability to access the loan it got from international financial market to the Christmas and New Year break.
However, competent Presidency sources said it is now clear to government that the preferred bidder do not have the required financial muscle to acquire the pioneer national telecom carrier. BusinessWorld Intelligence can therefore disclose that government is weighing options open to it in its bid to dispose the moribund telecom giant.
According to the source, some of the options open to government include invitation of the reserve bidder for negotiations, unbundling the enterprise and selling it in bits. Government may also explore the possibility of liquidating the telecom firm that once bestrode the nation’s landscape like a colossus. Government has in the last 10 years been making attempts to sell Nitel to a core investor and each attempt had repeatedly ended disastrously. In 2001, investors International London Limited (ILL), made an attempt to acquire Nitel, but defaulted in paying the bid price of $1.317 billion and lost the attempt.
Thereafter, Pentascope of Netherlands was appointed to revamp the moribund telecoms firm, but that attempt also failed. Orascom also attempted to acquire Nitel with $256.5 million but lost the bid to Transcorp, which acquired Nitel for $500 million. The sale to Transcorp in 2006 was the most successful with Transcorp acquiring a 75 per cent share of Nitel/M-tel, which was later reduced to 51per cent due to issues of finance. Transcorp at the time got a $500 million facility from a consortium of banks led by UBA Plc to acquire the shares. The Transcorp attempt did not revive Nitel and was finally revoked by the federal government.
New Generation had in February last year, emerged the preferred bidder in the Nitel financial and technical bid opening. President Goodluck Jonathan in October approved its bid to pay $2.5 billion for Nitel and its mobile subsidiary, Nigerian Mobile Telecommunications Limited.
It was followed in the Nitel bid by Omen International, which emerged the reserved bidder with $956 million, while Brymedia emerged third with $550 million. Other contenders for the acquisition of 75 per cent of Nitel and its M-Tel subsidiary included AFZI/Spectrum Consortium with a bid of $375.5 million and MTN Nigeria Communications Limited, which offered $25 million for SAT-3 only.
The consortium has since November been asking for extension to enable it mobilize the funds. The Bureau of Public Enterprises (BPE) had given the consortium a final extension which elapsed last December. The consortium had blamed its inability to access the loan it got from international financial market to the Christmas and New Year break.
However, competent Presidency sources said it is now clear to government that the preferred bidder do not have the required financial muscle to acquire the pioneer national telecom carrier. BusinessWorld Intelligence can therefore disclose that government is weighing options open to it in its bid to dispose the moribund telecom giant.
According to the source, some of the options open to government include invitation of the reserve bidder for negotiations, unbundling the enterprise and selling it in bits. Government may also explore the possibility of liquidating the telecom firm that once bestrode the nation’s landscape like a colossus. Government has in the last 10 years been making attempts to sell Nitel to a core investor and each attempt had repeatedly ended disastrously. In 2001, investors International London Limited (ILL), made an attempt to acquire Nitel, but defaulted in paying the bid price of $1.317 billion and lost the attempt.
Thereafter, Pentascope of Netherlands was appointed to revamp the moribund telecoms firm, but that attempt also failed. Orascom also attempted to acquire Nitel with $256.5 million but lost the bid to Transcorp, which acquired Nitel for $500 million. The sale to Transcorp in 2006 was the most successful with Transcorp acquiring a 75 per cent share of Nitel/M-tel, which was later reduced to 51per cent due to issues of finance. Transcorp at the time got a $500 million facility from a consortium of banks led by UBA Plc to acquire the shares. The Transcorp attempt did not revive Nitel and was finally revoked by the federal government.
