Nigeria: Brymedia Offers $900m for NITEL
Brymedia Consortium, the third place bid winner in the recently terminated privatisation process of the Nigerian Telecommunications Limited (NITEL) has offered to pay $900 million for the acquisition of the moribund national carrier.
THISDAY gathered that the consortium made the offer following reports that the federal government was adopting the willing buyer willing seller option to dispose of NITEL after the termination of the process by the Bureau of Public Enterprises(BPE). The BPE had terminated the process following the inability of both New Generation Consortium and Omen Consortium to pay, despite several extensions granted to them.
Brymedia’s Chief Executive Officer, Mr. Adrian Wood has a deep knowledge of the Nigerian telecoms industry, having been a key pioneer player in the rise of MTN Nigeria before he left. The consortium is said to be very keen and ready to pay the sum to turn NITEL around. Wood is said to have done adequate due diligence on NITEL and believes in the potential of the ailing entity to be a major telecoms player in Nigeria.
Wood, former CEO of MTN Nigeria runs Brymedia as project coordinator and is said to have an experienced team made up of former CEO of NITEL, Mr. Edwin Momife; former Chief Technical Officer of MTN, Mr. Demola Elesho; and the first Chief Marketing Officer of MTN, Mr. Afam Edozien. They are experienced and tested hands in the telecoms industry that set MTN on its glorious path to being the leading operator in Nigeria today.
The stakes for the acquisition of NITEL has risen following the termination of the process with several firms expressing interest and offering different sums to the federal government for the acquisition of NITEL.
NITEL possesses the first national operator licence said to be very valuable. NITEL also has a national fibre backbone, right of way and ducts scattered all over Nigeria, into which fibre can be put.
It could be recalled that the privatisation process of NITEL was terminated recently by the BPE following the inability of Omen International, the reserve bidder to revalidate its bid for NITEL, after several extensions granted to Omen.
The BPE stressed that despite extensions granted, the consortium still could not come up with the $105 million needed to revalidate its bid following the failure of New Generations Consortium to pay its own 30 per cent bid of $750 million.
This inability, thus technically, signalled the end of the bid process and takes NITEL back to the state in which it was a government-owned company before the current privatisation process began in 2009.
Following the termination, the BPE forwarded three options to the federal government to take on NITEL. One of the options is for the government to adopt a willing buyer, willing seller approach, another option is ‘’guided’’ liquidation while the third option is the renewal of the whole bidding process.
The New Generation Consortium, made up of China Unicom of Hong Kong, Minerva Group of Dubai and Nigeria’s GiCell Wireless Ltd, had in February, 2010 emerged the preferred bidder for the privatisation of NITEL and M-TEL with a price offer of $2.5 billion during the opening of financial bids for the privatisation process. The reserve bidder, Omen International came second with an offer of $956,996,091, Brymedia emerged third with $550 million and AFZI/Spectrum Consortium, emerged fourth with a bid of 375.5million. MTN Nigeria Communications Ltd, bidded $25Million for SAT-3 only. But since then, the process had been bedevilled with one problem or the other that finally led to its termination.
Brymedia had initially increased its offer for NITEL from the $550m it offered during the bidding process, before increasing it to $900million. THISDAY gathered that the current $900m the consortium is offering is a little bit more than the reserve price set internally by the BPE (not put into the RFP) at $850 million. The consortium had also pledged to put NITEL back on its feet in 18 months, if given the chance by the Federal Government, to acquire it.