As the December deadline for the race to pick a new core investor for the Nigerian Communications Ltd NITEL draws near, the Federal Government has picked BNP Paribas as its adviser on the deal.
The Federal Government through its Minister of State for Communications, Alhaji Dasuki Nakande, announced that BNP Paribas won the bid to advise government on the plan to secure a core investor for NITEL. Nakande who made the announcement after the National Council on Privatisation meeting yesterday in Abuja stated that the BNP Paribas, would be expected to review, evaluate and market NITEL.
Fifteen consortia had applied to the Bureau for Public Enterprises (BPE) to be engaged as privatisation advisors for the sale of 51per cent equity in NITELMtel.
The firms are: Lazard/Vetiva, Rothschild/UBA, Renaissance Capital, Millennium Finance, Awoyinfa Obafunsho & Co, CPCS Transcom, Lead Capital/Investec, FCMB/ Morgan Stanley, International/HSBC, Merrill Lynch/BGL and BNP Paribas.
BNP Paribas would also be expected to review the operations of NITEL/Mtel and prepare the Information Memorandum. It would also prepare valuation reports that will give an indicative base price for NITEL as well as prepare draft contract documents and all other transaction documents required for competitive and transparent bidding process.
He also emphasized that the consortium would also be expected to market NITEL/Mtel to prospective investors and assemble all documents that would be required in hosting data room.
As advisors on the privatization process, Paribas would also evaluate the technical proposals submitted by prospective core investors and advise the NCP accordingly and prepare a comprehensive post-transaction report for the NCP.”
It will be recalled that BNP Paribas was the same firm that acted as consultant on the sale of NITEL to Pentascope in 2003. It also valued NITEL for sale to Transnational corporation Tran-scorp.
Transcorp bought NITEL for 750 million dollars. However after two years of running NITEL, a controversy reared its head over the reversal or non reversal of the sale of the NITEL to Transcorp, which had bought 51 per cent of Federal Government’s holding. The controversy led to a new agreement between Transcorp and the Federal Government, and a resolve to get a new core investor for NITEL by end of December. The federal government which owns 49% stake in NITEL agreed to relinquish 24 per cent of its holding in NITEL to the new investor and retain 25 %, while Transcorp also agreed to relinquish 27% of its 51 per cent holding to the new investor as well in order to give up a total of 51% to the new investor. The privatisation process of NITEL has been fraught with several challenges. It began in 2001 but was halted in 2002 when the then Investors International London Ltd (IIL Limited) winner of the 51 per cent of NITEL equity failed to pay the $1.317 billion it offered. In 2006, Orascom of Egypt offered $256.53 million for NITEL but this was turned down by the government on the grounds that the amount was ridiculously low. The Federal Government through the BPE in March 2003 appointed the Dutch-based Pentascope to run NITEL/Mtel and prepare it for sale, under a three-year management contract. The privatization process was concluded on the fourth attempt through a negotiated core investor sale to TRANSCORP in partnership with British Telecoms and Etisalat of the United Arab Emirates . TRANSCORP offered $750 million (N97.5 billion) for 75 per cent equity. Etisalat subsequently withdrew from the partnership and TRANSCORP paid N63 billion, ($500 million) for 51 per cent equity in NITEL/Mtel.
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