Nigeria - BPE confirms payment of N12.7b for NITEL/MTEL by NATCOM

Mergers, Acquisitions and Financial Results

THE Bureau of Public Enterprises (BPE)  has said that the preferred bidder at the just completed liquidation of Nigeria Telecommunications Limited (NITEL) and its mobile arm, MTEL has paid 30 per cent, about  $75.7 million (N12.7 billion) as part payment of its $252.5 million bid price.

   According to the BPE, this is in line with the offer issued to the preferred bidder, which mandates NATCOM Consortium to make an initial deposit of 30 percent of the bid price not later than 14 days on receipt of the offer letter.

  A statement from BPE, Thursday, signed by its Head, Public Communications, Chigbo Anichebe informed that with the payment of the 30 per cent, NATCOM is expected to pay the balance of 70 per cent of the bid price within 90 days, adding that it is therefore imperative to inform creditors that disbursements to them will be considered only after full payment has been received.

   It would be recalled that the National Council on Privatisation (NCP), at its meeting of Feb. 27, 2012, approved the privatisation of NITEL/MTEL through “guided liquidation”.

   The strategy was adopted by the NCP in the light of the previous failed attempts to privatise NITEL/MTEL and the huge liabilities of creditors to the tune of over N300 billion.

  Consequently, BPE held a public bidding, which NATCOM Consortium, won on Dec. 3, 2014 with a bid price of $252.5 million.

   According to the BPE, under the guided liquidation strategy, all the core assets and business undertaking of NITEL and MTEL were to be sold as a single or multiple lots to a qualified bidder by the Liquidator under the general guidance of the National Council on Privatisation.

   Thus, the bidder that acquires the assets of NITEL and MTEL will pledge to continue to operate the assets to provide telecoms services. This is as against the traditional liquidation of an enterprise by asset stripping.

    Consequently, advertisements for submission of Expressions of Interest (EOIs) from prospective bidders for the acquisition of the assets and business undertaking of NITEL and MTEL were placed in both local and international print media by the Liquidator. At the closing date on June 30, 2014, 17 organizations/consortium submitted EOIs; and only two satisfactorily met the stipulated criteria for pre-qualification.

   BPE informed that on September 18, 2014, the two successful applicants, NATCOM Consortium and NETTAG Consortium, that met the minimum pass mark of 75 per cent were pre-qualified and issued the Request for Proposals (RFP) and allowed to proceed to data room and physical due diligence stage prior to preparation and submission of their technical and financial proposals.

   The deadline for submission of technical and financial bids was Friday, November 7, 2014. The two pre-qualified bidders, NATCOM Consortium and NETTAG Consortium, submitted their technical and financial bids before the expiry of the deadline. The technical bids received from the two bidders were evaluated.

    Unfortunately, one of the two pre-qualified bidders, NETTAG Consortium, was disqualified for failure to enclose a bid bond as clearly stipulated in the RFP.

   Following the disqualification of NETTAG Consortium, only the financial bid of NATCOM Consortium qualified for opening on December 3, 2014; having scored an average of 92 per cent in its technical proposal which was above the minimum pass mark of 75 per cent, and satisfied the requirement of a valid bid bond.

Accordingly, the financial proposal of NATCOM Consortium was publicly opened on Wednesday, December 3, 2014, which it won with a bid price of $252.25m.

Consequently, the Chairman of the Consortium, Dr. Olatunde Ayeni, on Monday, December 22, 2014 in Abuja, signed the Assets Sale Agreement and was given the Offer Letter by the Bureau of Public Enterprises (BPE).

    Already, the Association of Telecommunications Companies of Nigeria (ATCON), Lanre Ajayi, among others stakeholders in the ICT sector have called on NATCOM to concentrate on bridging the country’s 92 per cent broadband gap, because of its enormous infrastructure including the SAT 3 fbre optic cable.

   Ajayi believed that broadband deployment is an area the new NITEL investors should concentrate on.

  Ajayi, an engineer, said with the current six per cent penetration, “it means that Nigeria still has 92 per cent broadband gap to fill. This is a huge opportunity for NITEL and other broadband investors.

   “Broadband encompasses all things call telecommunications. Sooner, voice could become a Value Added Service if access to broadband is high”, he stated.

Source: The Guardian 9 January 2015