Doubts grow over $2.5 bln Nigerian Nitel/M-Tel sale

Mergers, Acquisitions and Financial Results

Doubts surfaced over the planned $2.5 billion sale of Nigeria's former state telecoms monopoly on Thursday when China Unicom denied involvement in bidding in the African country's biggest privatisation.

But Nigeria said the bid for a stake in of one of the world's fastest growing telecoms markets still stood and GiCell Wireless, the small Nigerian operator fronting the bid consortium for Nitel, said financing was coming from Dubai rather than China. "We didn't pull all this out of the air," Usman Gumi, managing director of GiCell, told Reuters.

The confusion over Nitel's sale highlighted the unpredictability of cross-border African telecoms deals at a time India's Bharti Airtel Ltd is bidding $9 billion for the African assets of Kuwait's Zain.

When Nigeria's National Council on Privatisation announced its preferred bidder on Tuesday, it named Unicom, China's No. 2 carrier, as part of the New Generation Telecommunications Ltd. consortium along with the Minerva Group from Dubai.

But Unicom denied any part in a bid that telecoms analysts said was very high for a firm Nigeria has struggled to sell since 2001, when liberalisation made it uncompetitive. One consultant estimated Nitel's value at no more than $500 million.

"There's no involvement of this project from the parent company, the listed company or any subsidiary of the company," said Unicom spokeswoman Sophia Tso in a statement.

However Gumi and Nigeria's privatisation agency, the Bureau of Public Enterprises, said Unicom's European office had sent a letter offering technical support should the bid succeed and also the possibility of taking a 20 percent equity stake.

The privatisation agency said this had been confirmed by BNP Paribas, its advisor on the sale. Unicom officials in London said they wanted to check the veracity of the letter."It is still on," said Joe Anichebe, spokesman for the Bureau of Public Enterprises of the bid. There was also uncertainty over the identity of the company in Dubai reported to be providing financing.

Officials at Minerva FZ, Minerva Traders LLC and Minerva Middle East in the Dubai International Financial Centre and Minerva Middle East said they were not involved in the deal. Calls to Minerva General Trading were not immediately answered. Gumi said he could not give further details on the identity of the group without getting clearance. "We believe Nitel is worth the amount because of the infrastructure and potential that it has," he said.

Nitel's fixed lines have fallen to fewer than 100,000 from five times that number in 2001 and subscribers to its MTEL mobile unit have dropped to a few thousand from over 1 million. The reserve bidder for Nitel was Omen International Ltd, registered in the British Virgin Islands, with a bid of $956 million.