Monday, June 20, 2011

Nigeria - Govt has abandoned the sale of NITEL, following the failure of Omen Intl to validate its bond

[nsadaq] Nigeria's Bureau of Public Enterprises has terminated the sale of state-run Nigerian Telecommunications Ltd, known as Nitel, and its mobile arm M-Tel, the bureau said.

BPE took the action after reserve bidder Omen International Consortium, failed to validate its bid bond of $105 million by the June 10 deadline.

The bureau had invited Omen International Consortium to revalidate its bid after preferred bidder New Generation Telecommunications Ltd. failed to pay the required $750 million, or 30% of its $2.5 million offer for both companies, within the specified time.

Nwokoh said the deadline given to Omen was extended until June 15 but payment was still not received at the close of business on that date and the transaction was therefore annulled.

President Goodluck Jonathan had approved the sale of Nitel and M-Tel to New Generation Telecom Ltd in February.

Nwokoh said the BPE was now exploring its options.

It is the second time the sale of Nitel and M-Tel has failed.

In 2006, Transnational Corp. of Nigeria, bought 51% of both companies, with the Nigerian government holding the remaining 49% stake. But Transcorp, a conglomerate holding investments in hotel, power and other businesses, was unable to properly fund the companies' operations and the government voided the sale on the grounds that Transcorp had failed to adhere to the terms of the sale.

Nitel is Nigeria`s main fixed-line telecom provider but its business ran aground, largely due to mismanagement and corruption.

Nigeria Ends Privatization Of Telecommunications Firms-Official

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