Nitel is up for privatisation again in Nigeria
Nigeria’s Bureau of Public Enterprises (BPE) said that the National Council on Privatisation (NCP) has given it the go-ahead to advertise fresh call for Expressions of Interest (EOIs) by a core group of strategic investors to acquire 51 per cent equity stake in the Nigerian Telecommunications Plc (NITEL) and its mobile arm, MTEL.
This, the BPE stated, was consequent upon extensive consultations and negotiations between the NCP/BPE and Transcorp on one hand and other stakeholders to begin the process of engaging a new core investor with the requisite technical, managerial and financial resources to take over the management of NITEL/MTEL from Transcorp, its current managers.
The BPE's Head of Communications, Chigbo Anichebe said the decision to re-advertise for core investor's 51 per cent stake in Nitel/MTel was taken by the NCP at its 57th meeting in Abuja. Anichebe stated that, to be pre-qualified, prospective investors must be a reputable telecommunications operators with track record in the telecommunications sector.
In addition, he said, they should also possess verifiable evidence of "at least two million fixed or GSM lines installed by one or more telecommunications companies that the strategic investor operates or controls; proven track record of expanding a telecommunications network of fixed or mobile lines; a minimum net worth of at least US$500 million; and where the prospective investor is a consortium, the operator must own at least 51 per cent equity in the bidding vehicle."
The Federal Government had in 2006, sold 51 per cent stake to Transcorp Plc and retained 49 per cent. The shareholders mutually consented to re-structure the current shareholding and admit a core investor who will buy a 51 per cent stake in the company.
The 51 per cent will be contributed by both the Federal Government and Transcorp Plc. To accomplish the government's objectives, the BPE and Transcorp had earlier obtained the services of an advisory consortium comprising financial, legal, marketing, accounting, technical and valuation advisers to advise it on the privatisation process.
Consequently, a consortium led by BNP Paribas/Eleda Capital Partners was engaged which Anichebe revealed, is expected to, among others, review the operations of Nitel and MTel and prepare an information memorandum on the company. He added that the consortium would also prepare valuation reports that will give an indicative base price for the enterprise as well as prepare draft contract documents and all other transaction documents required for an open, transparent and competitive bidding process. The BPE spokesman said the consortium would also be expected to market Nitel/MTel to prospective investors and assemble all documents required in hosting a data room for due diligence investigations.
Another key task of the privatisation advisers would be to evaluate the technical proposals submitted by prospective core investors and advise the NCP accordingly and prepare a comprehensive post-transaction report for Council. The NCP therefore directed the BPE to work with the Advisers in producing a fresh time table for the transaction. Anichebe also said as part of its decision, the NCP also approved the setting up of an Advisory Committee for the transaction.
The Committee, which is headed by the Chairman of its Technical Committee, Mohammed Hayatu-Deen, with membership drawn from BPE, Transcorp and NCP Chairman's Office is expected to make definite proposals to the NCP on modalities for resolving all issues which may hinder a smooth transaction process He revealed that, as part of its assignment, the Advisory Committee was directed by the NCP to work with Transcorp to deploy more human resources in the Accounts Department of Nitel to ensure speedy completion of Nitel/MTel audited accounts in time for the transaction.