A new core investor is to take over the Nigerian Telecommunications Ltd., or NITEL and its subsidiary Mobile Telecommunications Ltd., or MTEL, in February 2009, the National Council on Privatization, or NCP, said Tuesday.
Nigeria has retained BNP Paribas to act as adviser for the privatization of both companies.
The NCP said it had decided to cut the timeframe for the privatization of NITEL and MTEL from seven to three months adding that the core investor is to take over both companies by Feb. 6, 2009.
Companies from Egypt and South Africa and the Vodafone Group (VOD) have indicated interest in bidding for NITEL and MTEL.
According to the privatization plan, management presentation and finalization of transaction documents of bidders will be carried out by Dec. 22, 2008. Preparation and submission of technical and financial bids with payment of 50% of bid amount will be carried out by Jan. 15, 2009, while evaluation of technical proposals is slated to end by Jan. 20 and these are to be approved by the technical committee of the NCP on Jan. 21.
The opening of financial bids is scheduled for Jan. 27, while the approval of the financial offers by the NCP is to be done by Feb 2. With this, the new owners of NITEL and MTEL will emerge.
The NITEL and MTEL privatization process comes to an end between Feb 3 and 6 with the handover preceded by the signing of the transfer agreement between the new owners and the federal government after full payment by the new core investors.
In 2006, Transnational Corp. of Nigeria (TCNP.LA) paid $500 million to acquire 51% in both companies, while the government held the remaining 49%. However, Transcorp was unable to properly fund their operations.
The government and Transcorp in February 2008 agreed to bring in a new core investor into both companies, with a 51% stake. Under the new arrangement, Transcorp will shed 29% of the 51% it is currently holding in NITEL and MTEL, while the government will shed 22% of the 49% holding.
The new core investor, according to the government, will have the required technical, managerial and financial resources to take over the management of the two companies from Transcorp.
-By Obafemi Oredein, contributing to Dow Jones Newswires
