New Generation misses NITEL payment deadline, seeks extension

5 Nov 2010

According to a report by Reuters, New Generation Telecommunications, the consortium which emerged as the preferred buyer for ailing state-run incumbent telco Nigeria Telecommunications (NITEL) in February 2010, has asked for an extension to the payment deadline after some of its backers got ‘cold feet’. Last month President Goodluck Jonathon approved the consortium’s bid of USD2.5 billion for a 75% stake in NITEL and its mobile arm M-Tel, after an eight month delay. New Generation – which comprises Minerva Group of Dubai, Nigeria’s GiCell Wireless and technical partner China Unicom – was asked to pay a bid security of USD750 million within ten days from 25 October and was given 60 days to pay the remaining USD1.75 billion. However, GiCell has now requested a 30-day extension to the deadline for the bid security, with the firm’s managing director, Usman Gumi, stating: ‘Since the bid was won on 16 February, it has taken [the] government almost eight months to give final approval. Over this period our financial partners have developed cold feet and we need to reassure them of their investment security.’ According to TeleGeography’s GlobalComms Database, the government’s delay in approving the bid was caused by initial confusion about China Unicom’s involvement in the consortium, which led to criticism that the process had been marred by irregularities and a lack of transparency. Rather than approving the bid, the National Council of Privatisation (NCP) opted to inaugurate a committee to undertake further due diligence on the bidders of NITEL. In June 2010 the panel recommended that the deal be approved.

Nigeria, ntel (formerly NITEL/M-Tel)