Acting President's busy schedule stalls NITEL takeover

Mergers, Acquisitions and Financial Results

The National Council on Privatisation's delay in issuing a confirmation letter to the preferred bidder in the Nigerian Telecommunications Limited (NITEL), almost three weeks after the financial bids were opened and a winner declared, has been blamed on Acting President Goodluck Jonathan's tight schedule occasioned by President Umaru Yar'Adua's ill-health.

Mr. Yar'Adua's poor health has kept him out of office since last year. The president had been abroad for about 94 days in search of medical attention in Saudi Arabia, and has not been seen in public in the last one week of his "return" to the country.

In his absence, his deputy, Goodluck Jonathan, who also the chairs the privatisation council, took over the mantle of leadership combining his functions as Vice President and Acting President.

The Acting President is now too busy to urgently attend to matters relating to the privatisation council.

The spokesperson for the Bureau of Public Enterprises, Joe Anichebe, told NEXT in a telephone interview that, "Ordinarily, it is not supposed to take such a long time. But, the present situation is peculiar, as the Acting President has been very busy with other official state matters as a result of the current political crisis in the country."

Mr. Anichebe denied that the delay had something to do with recent reports alleging that the exercise lacked transparency, and questioning the integrity of the bid process.

NEXT gathered yesterday that the Council, which was earlier scheduled to meet on Monday to ratify the result, had to reschedule the meeting at the last minute to suit the Acting President's schedule for him to be in attendance. March 9 has been fixed as the new date for the meeting.

Last week, Taiwo Osipitan, the acting chairperson of the Technical Committee of the Council, and Christopher Anyanwu, the BPE's Director General, recommended that the bid result be ratified and the preferred winner issued with a confirmation letter.

According to them, the transactions followed a "very transparent bid process" which was in accordance with best practices and standards obtainable in the international community."

One bidder in the exercise, Brymedia West Africa Limited, is, however, hopeful that it will own NITEL.

It came third in the exercise and Brymedia's expectation is based on the possibilities that the Council will nullify the bid or that the New Generation Consortium will be unable to raise the $2.5billion it bid for the acquisition, thereby paving the way for it to acquire the national carrier.

Adrian Wood, the chief executive officer of Brymedia West Africa Limited told NEXT in a telephone interview on Tuesday, "Although, the technical committee last week told the council to accept the bid of the preferred bidder, that does not mean that the council would approve the bid. No approval has been made yet, so we are still watching the process."

Brymedia's expectations are also hinged on its conviction that NITEL was over-priced at $2.5billion.

"Obviously, they bid a lot of money; the preferred bidder bided almost five times the amount that we bid. I don't know how much work they did in viewing the project but if they are willing to spend that amount, good luck to them," Mr. Wood argued

"It is very important to put money into the project. Don't forget that the amount that is bided is all going to the BPE. It does not add to employing the people, supplying the infrastructure, to set up any facilities, does not provide customer care service etc."

As far as the consortium is concerned, NITEL's worth is the $551 million it is willing to pay.

"Yes, when we originally, thought about it and did a lot of due diligence, I think you know that we have lots of experience in the Nigerian telecom industry from our pedigrees working with MTN Nigeria, we have six former executives from MTN Nigeria on our team and also from Zain Nigeria.

"So, we did a lot of due diligence and we had industry information and other information that the BPE made available. When we put all that together and spoke to our investors we thought that the realm of the range was about $550million and that we would really, would start to get nervous if we were bidding over $600million.

"There were so many risks with the project, so much of the market has been absorb by existing operators, so we figured what we bided was fair enough."

Mr. Wood also said his company's partnership with Telecom New Zealand International Ltd remains intact.