A faceless group close to the Federal Government has emerged the preferred bidder for the moribund telecommunication giant, Nigeria Telecommunications Limited, NITEL and its wireless arm Nigeria Mobiletel-communicatios Limited, Mtel which it acquired at $2.5 billion
Unlike in the past, yesterday's bidding process was shrouded in secrecy which was against the spirit of openness and transparency of the bidding exercise. The names behind the preferred bidder are still a mystery.
At the bidding conducted by the National Council on Privatisation (NCP) and the Bureau of Public Enterprises (BPE) in Abuja, yesterday, New Generation Telecommunication Limited emerged winner after beating four other firms which participated in the bidding with an offer of $2.5 billion (about N350 billion).
New Generation Telecommunication has Gicell Wireless Limited, China Unicom (Hong Kong Limited and Minerva Group as members of the consortium. The consortium had offered $337,000 and 33 cents for the whole of NITEL in the first round of the bidding process placing second to Omen International (British Virgin Islands with an offer of $350 million.
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Other firms that took part in the exercise were: Brymedia offered $100,000 for the whole of NITEL and M-Tel in the first round of bidding while AFZI, Spectrum Consortium offered $200 milliom for the whole of NITEL and $173.333 for NITEL excluding national fibre-optic transmission backbone (CDMA).
However in the second round of bidding, New Generation Telecommunication reversed its bid to $2.5 billion to emerge winner as against Brymedias $551 million,Omen International Limited's $956million and AFZI Consortiums $375.5 million.
Omen International Limited which emerged reserved bidder with the offer of $956million for the whole of NITEL has China Unicom Network Communications Company Limited as technical partners. Fiber Home Technologies Company Limited is also a member of the consortium.
MTN Nigeria Limited also participated in the bidding process with an offer of $25million for NITEL's SAT-3. MTN maintained its offer in both the first and second rounds of bidding. MTNs participation in yesterday's bidding laid to rest, speculations that the communication giant had been disqualified from the bidding exercise.
But as exclusively reported by LEADERSHIP on Monday, Globacom was disqualified from the bidding on the grounds of being the second national carrier with the only one operational license which it acquiredin 2002.
New Generation Telecommunication Limited had offered to take over the entire liabilities of NITEL with an initial offer of $337,000 but the National Council on Privatization turned this down on the grounds that the federal government was selling NITEL without liabilities.
Speaking with finance correspondents after the bidding, the team leader of New Generation Telecommunication Limited, Alhaji Usman Abubakar Gumi assured Nigerians that the consortium was set to carry out a telecommunication revolution in the country.
"We cannot watch a national infrastructure like NITEL decaying and no body is coming to its rescue", Gumi stated.
He said their technical partners is Unicom China with subscribers of about 266 million and 500,000 base stations which positions them to handle the miniature 600 base stations of NITEL.
Asked of the ability of the consortium to pay $2.5 billion before the date stipulated by BPE, Gumi said, "We are committed and we are going to pay within the timeframe stipulated by the Bureau of Public Enterprises."
The Chairman of Technical Committee of the National Council on Privatisation, Dr Mohammed Hayatu-Deen and the Director General of BPE,Dr Christopher Anyanwu assured that the NCP would continue to do its best to ensure that the transactions are accomplished through internationally acceptable standards.
Anyanwu had explained that NITEL and Mtel would be bought by investors free of debts because both NITEL and Mtel and Transcorp management had failed to maintain adequate records and accounts of their stewardship that could in anyway be relied on by investors.
According to him, the entire debts would be warehoused for subsequent settlement from the proceeds realised from the sale, while the assets would be delineated and assigned to the different business units in an unbounded sale if this happens to be a successful process.
Fourteen prospective investors undertook the virtual or electronic due diligence on Nitel and M-tel. The investors are MTN Nigeria Communication Ltd; Etisalat Nigeria; Brymedia (WA) Ltd; Finetek.com/Ericsson consortium; Omen International Ltd (BVI); Fugar Technologies and MTI Consortium. Others are Telefonica Consortium; Globacom Nigeria Ltd; Conau Ltd; Dansacom Technologies Ltd; Adison Consulting; AF21/ Spectrum Consortium and Foneama.com.
The advertisement for expressions of interest from prospective investors for the acquisition of at least 75 per cent equity in NITEL was published locally and internationally in July 2009.
The consortia that were pre-qualified for the next stage paid a non-refundable fee of $25, 000 for bidding documents and executed the confidentiality and non-disclosure agreement.
This is the fifth time the Federal government attempted to sell the telecommunication company. The embattled firm was sold to IILL in 2001 but the firm was unable to pay the money before the stipulated time. It was latter sold to Orascom of India for $2m but government said it fell short of the reserved price. The firm was also sold to Transnational Corporation (Transcorp) for $500m but the company could not pay money before deadline.
The Nigerian Communications Commission (NCC), as part of the evaluation of the prospective bidders, is expected to conduct a 'fit and proper' test on each bidding consortium to participate in the bidding exercise.
In the advertisement, prospective investors were invited to apply to acquire either at least 75 per cent equity in the entire NITEL conglomerate or a stake in one or several of its components, namely, SAT-3; domestic fixed line telephony; national fibre-optic transmission backbone; CDMA network; and MTEL (GSM);
It also noted that preference would be given to bidders who desire to acquire NITEL fixed lines, transmission backbone, MTEL and SAT-3 components together while those bidding separately for MTEL must be ready to make necessary investments to detach MTEL from the NITEL networks.
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