[this day] The National Council on Privatisation (NCP) seven-member committee set up last March to conduct due diligence on prospective bidders for Nigerian Telecommunications Ltd. (NITEL) has submitted its report to President Goodluck Jonathan.
Unconfirmed reports disclosed yesrterday that the committee made two recommendations.
The first is that the New Generation Consortium, which had emerged the winner of the bidding process be allowed to pay $750 million as deposit of the $2,5billion offered within the next 10 days.
Alternatively, the NCP should adopt a willing buyer/willing seller approach by negotiating with the second and third preferred bidder - Omen International and Brymedia, to arrive at a preferred price for NITEL.
The New Generation Consortuim made up of China Unicom of Hong Kong, Minerva Group of Dubai and Nigeria's GiCell Wireless Ltd had emerged the preferred bidder with a bid of $2.5 billion for NITEL.
This was followed by Omen International, which emerged the reserved bidder with a bid of $956 million, while Brymedia emerged third with $550 million. Other contenders who bided for the acquisition of 75 per cent of NITEL and its M-Tel subsidiary include AFZI/ Spectrum Consortium, (the fourth) with a bid of 375.5 million and MTN Nigeria Communications Ltd, which offered $25 million for SAT-3 only.
Following the announcement of the winning bid, controversy arose with China Unicom swiftly denying being part of the bid. It took paid advertorials in some national dailies to deny being involved in the deal. The denial by the Chinese firm had cast a shadow of doubt on the integrity of the process, even though the BPE rose up to defend itself by denying the claims of the firm.
The denial by China Unicom at that time was speedily followed by that of another consortium member, Telcom New Zealand, which also denied being part of the Brymedia consortium that came third in the bidding process. These developments added to speculations that all was not well with the deal even though Brymedia also swiftly responded to the denial, which it claimed was not true.
BPE's then Head of Public Communications, Chigbo Anichebe, in reaction to claims by China Unicom and Telcom New Zealand that they were not part of the process, reiterated that despite the denials by both firms, the BPE "has not seen any evidence to the contrary." He stated that the bureau had letters in its possession confirming the foreign members of the consortiums that bidded for Nitel and their roles in the transaction.
The uproar generated by this led to the suspension of the DG, of BPE, Christopher Anyanwu, and the setting up of a seven man committee to do further due diligence to ascertain the credibility of the process.
President Jonathan is getting the report three months after the setting up of the committee, which was mandated to submit its report in seven days. The NCP, which met on Friday, was said to have decided to submit the report to Jonathan because he mandated the setting up of the committee. The committee members resolved to meet in a week's time to examine the recommendations after the President must have studied the report.
Attempts to get the BPE and the NCP to confirm the recommendations was unsuccessful as at press time.
Attempts to sell NITEL to core investors had in the past run into troubled waters. In 2001, Investors International London Limited (ILL), attempted 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, which cancelled the sale of the NITEL and its mobile subsidiary, MTel to the corporation.
The Federal Government revoked the Transcorp sale because Transcorp breached the terms and conditions of the Shares Sales Purchase Agreement (SSPA).
Nigeria: Nitel - NCP Panel Submits Report, Proposes Two Options