[234 next] The Federal Government may be compelled to press the liquidation button in the sale of the moribund national telecommunications carrier, Nigerian Telecommunications Limited (NITEL), if by close of business today the reserve bidder, Omen International Limited, failed to meet the deadline for the payment of its bid security.
Omen International Consortium had emerged the reserve bidder during the February 16, 2010 financial bid exercise with an offer price of $956 million.
Following the disqualification of the preferred bidder, New Generation Consortium, on the heels of its inability to pay up the mandatory 30 percent bid security for its $2.5 billion offer after several deadline extensions, Omen was invited to revalidate its April 4, 2010 bid bond in accordance with the provisions of Section 3.4.3 of the Request for Proposal (RFP).
The decision of the Bureau of Public Enterprises (BPE) to invite Omen Consortium was sequel to the adoption of the recommendation of the ad-hoc committee constituted to review the confusion that had trailed the sale of NITEL and its mobile subsidiary, MTel, for government to either invite the reserve bidder to take over the bid, or for the bid process to be restarted.
But the director general of BPE, Bolanle Onagoruwa, hinted yesterday in Abuja that government may be compelled to resort to the irrevocable decision to liquidate the national carrier should the reserve bidder be unable to meet the extended deadline for the payment of the bid security by Wednesday (today).
Ms Onagoruwa, who was speaking as special guest on the Eminent Speakers lecture series of the Securities and Exchange Commission (SEC) organised for key government agencies and departments to educate staff of the commission on their achievements and challenges, said though the deadline for Omen to make the payment lapsed last Friday, an extension was granted till Tuesday.
"After the preferred bidder, New Generation, failed to pay, in spite of several extensions, we (BPE) resorted to the reserve bidder in line with the requirements of the bid process, requesting them (Omen) to pay for the bid security, which comes to about $105 million.
"They also asked for extension, claiming that apart from the elections, their financiers were worried about the stability of the Nigerian government, and therefore that they should be given up to June 10, 2011 for them to come up with the payment.
"But June 10 was last Friday. As of that day, they brought in a letter saying that they had transferred the money, and that BPE should expect the money to hit its account latest by Wednesday (today). The point is that the money should have been in BPE's account before Friday. However, nothing like that has happened as at now. But, we want to give them up till that Wednesday, to see whether the money is going to come."
"We already know what we are going to do if by Wednesday the money is not in. There is no equivocation about the fact that the transaction would have to be terminated and we move to the next stage," she explained.
According to her, among the various ideas the Bureau has already suggested to government is the process of guided liquidation, which entails the liquidation of the enterprise without breaking it up into units.
Though she likened this option to being almost similar to the normal privatisation transaction, the BPE boss identified some inherent benefits, particularly in terms of what would be available to stakeholders at the end to settle all existing debts.
"We are giving thought to this, to enable us sell the company and still have one single entity. The reason for this is because the contract that is applicable has certain clauses that would make it difficult for BPE to break NITEL up into little entities. But, we are also considering negotiated sale as the other option, which government, at the end of the day, would have to make that call, though we have made suggestions to the appropriate authorities for approval," she said.
The negotiated sale option, she explained, would entail government going out to look for some big players with the right financial clout and technological ability to run the place, to take it off the ground and manage it.
Government may opt for NITEL liquidation