Trio prequalify for NITEL liquidation

28 May 2013

Nigeria’s Bureau for Public Enterprises (BPE) has approved three companies to bid for the planned liquidation of ailing fixed line incumbent Nigeria Telecommunications (NITEL) and its mobile arm M-Tel. Local newspaper Vanguard cites a statement from the BPE’s head of public communications, Chigbo Anichebe, as saying that out of the 35 Expressions of Interest (EoI) that were submitted to the BPE, only three of the technical proposals scored the required threshold of 75% or above. Meanwhile, local press reported last week that the Senate had expressed its opposition to the planned liquidation of NITEL, on the grounds that neither the BPE nor the National Council on Privatisation (NCP) have been able to determine the true value of the state-owned telco. NITEL’s debts are said to total around NGN351 billion (USD2.2 billion), of which around NGN179 billion is owed to the federal government and roughly NGN64 billion to banks. Chairman of the Senate Committee on Privatisation, Sen. Olugbenga Obadara, was reported as saying that NITEL could yet be revived through a public private partnership (PPP): ‘Through this method, more people will be employed throughout the country and the country’s GDP will equally increase. At the end of the tenure of the concessionaire, the country will have a good telecommunications company to run and be able to go to the stock exchange for Nigerians to buy into the company.’

TeleGeography’s GlobalComms Database notes that the federal government approved the adoption of a guided liquidation strategy for NITEL and M-Tel in March last year, following a series of failed attempts at selling the indebted state-owned telco. In June 2011 the latest attempt to privatise the firm was cancelled when the reserve bidder, British Virgin Islands-based Omen International, failed to meet the deadline to pay its USD105 million bid security. Omen was invited to re-register its interest in buying NITEL in March 2011, as preferred buyer New Generation Telecommunications repeatedly missed 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.

Nigeria, ntel (formerly NITEL/M-Tel)