Nigeria puts sale of NITEL to sleep

16 Jun 2011

The latest attempt to privatise Nigeria Telecommunications (NITEL) has been terminated after the ailing state-run telco’s reserve bidder, Omen International, failed to meet the deadline to pay a bid security, Reuters reports. The Bureau of Public Enterprises (BPE) had given the British Virgin Islands-based Omen consortium until 10 June to make the initial payment of USD105 million for a 75% stake in NITEL and its mobile arm M-Tel, and granted an additional five-day extension, but it still failed to transfer the funds. ‘Following the inability of Omen International Consortium … to revalidate its bid bond of USD105 million at the deadline of 10 June, the BPE has terminated the privatisation of the telecoms utility which began in 2009,’ the BPE said in a statement. As previously reported by CommsUpdate, the Omen consortium, which includes China Unicom and Fiber Home Technologies Limited, was invited to re-register its interest in buying NITEL in March 2011, after preferred buyer New Generation Telecommunications repeatedly failed to meet the payment deadlines for its bid of USD2.5 billion. Omen offered USD956.9 million during the latest attempt to privatise the company, held in February 2010. The government began seeking a buyer for a minimum 75% of NITEL and 100% of M-Tel in July 2009 after previous majority shareholder Transcorp divested its stake earlier in the year.

Earlier this week, the BPE said that should Omen fail to pay, it would consider other options for NITEL, including setting a minimum price and offering it to the remaining bidders, as well as liquidating the struggling company, or restarting the whole bidding process again. Following the cancellation of the sale to Omen, the BPE has emphasised that no decision had yet been taken by the government on which option to pursue.

Nigeria, ntel (formerly NITEL/M-Tel)