THE approval for payment of 30% security of the US$2.5 billion winning bid from buyers of ailing Nigeria Telecommunications (Nitel) Plc expires today, raising fears about the ability of New Generation consortium, the preferred bidder, to raise money.
New Generation last February emerged the preferred bidder with a bid of US$2.5 billion.
The consortium is made up China Unicom, Dubai company Minerva and local firm GiCell, headed by Usman Gumi. The payment of US$750 million security will validate the consortium’s bid to buy Nitel. The Bureau of Public Enterprises (BPE) said the consortium had received the notification on October 25.
Spokesman of BPE Chukwuma Nwokoh said yesterday that the consortium was yet to effect the payment but it still had today to do so. Asked what would happen if the consortium defaults in the payment, Nwokoh said: “We will cross the bridge when we get there. We can’t be speculating.”
Representative of the New Generation consortium in Nigeria, Gumi, told this reporter to give him up to 6pm today before speaking to him. However Gumi had last month said that his group was satisfied with President Goodluck Jonathan’s approval and that, all things being equal, it would strive to meet the requirement.
President Jonathan set up a panel in March, led by the attorney general, to investigate the top two bidders. The privatisation agency, the BPE, said three weeks ago the committee had found the planned transaction complied with due process.
The BPE had invited expressions of interest more than a year ago for a minimum of a 75% stake in the Nitel conglomerate, or a stake in one or several of its components including mobile arm M-tel, the South Atlantic Terminal underwater cable (SAT-3) and its domestic fixed line network.
Government has been trying to sell Nitel over the years without success. It began in 2000 and was stopped in 2002 when International Investors (London) Ltd of London, the core investor, failed to pay the US$1.317 billion it had offered.
In 2003 Pentascope was appointed by government to run a three-year contract to prepare it for sale but this was aborted due to alleged incompetence.
In 2006, Orascom of Egypt offered US$256.53 million but this was also rejected by the Federal Government on the grounds that it was far below Nitel’s market value.
Transcorp in 2006 also offered to buy 5% stake at US$500million but the deal went sour and Transcorp had to relinquish its shareholding.
Nitel’s fixed lines have dropped to less than 100 000 from five times that number in 2001 and subscribers to its M-tel mobile unit have dropped to a few hundreds, a source said.
SIMEON OGOEGBULEM in Abuja, Nigeria
