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Nigeria: Nitel - New Core Investors to Get 51 Percent Shares - Odey
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Daily Trust (Abuja)
25 June 2008
Posted to the web 25 June 2008
Theophilus Abbah and Yunus Abulhamid
A new core investor is set to take over NITEL from the Transcorp Plc after the company has been left virtually paralysed since 2006 when the federal government under President Olusegun Obasanjo sold 51% shares to it.
This was confirmed to Daily Trust at the weekend by the Bureau of Private Enterprises [BPE]. The National Council on Privatisation (NCP), during its 51st meeting, approved the issuance of Request for Proposals (RFPs) to 11 of the 15 consortia that applied to the BPE to be engaged as private advisers for the sale of 51 percent equity in NITEL/Mtel.
The sale of Nitel to local group, Transcorp was a flagship measure of former President Olusegun Obasanjo's administration but generated accusations of cronyism because Transcorp was created by a group of his business allies.
The company bought 51 percent shares of Nitel for 500 million dollars in August 2006, but has since failed to revive the firm. Many of its lines malfunction, its billings erratic while staff go for months without being paid.
Transcorp and the government agreed in February that a new investor needed to be found but the process is not yet complete.
The Minister of Information and Communications, Mr.John Odey, told Reuters that government would soon get a core investor before the end of the year.
Also speaking to Daily Trust, the BPE's Head of Public Communications, Mr. Joe Chigbo Anichebe, disclosed that the Bureau would soon receive technical and financial proposals from the 11 shortlisted consortia from which one qualified company would be selected to provide advisory services which will lead to the sale of 51 percent equity to a new investor to emerge.
"When the advisers come in, they will draw a work plan and get what we call information memorandum and do the valuation and they start even the marketing. That is when we start looking for core investors. Right now, the important thing for us is to secure advisers who will work the transaction," he said.
In the new envisaged take over, "the federal government is contributing 22% while Transcorp contributes 29 %.
Among the 11 companies that are submitting Request for Proposals as approved by the NCP are; Lazard/Vetica, Rothschild/UBA, Renaissance Capital, Millennium Finance, Awoyinfa Obafunsho & Co and CPCS Transcom. Others are, Lead Capital/Investec, FCMB/Morgan Stanley, Intercontinental/HSBC, Merill Lynch/BGL and BNP Paribas.
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The successful company would provide "an advisory service that would include financial, legal, marketing, accounting, technical and valuation."
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| Copyright © 2008 Daily Trust. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here. | |||||||||||||||||||||||||||||
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