Posted by Belinda Anderson on
Nigeria's Bureau of Public Enterprises (BPE), the body charged with privatising state assets in sectors like telecommunications and energy, says the process of selling off a controlling stake in fixed and mobile telecoms operator Nitel has not been delayed.
Nigeria's Bureau of Public Enterprises (BPE), the body charged with privatising state assets in sectors like telecommunications and energy, says the process of selling off a controlling stake in fixed and mobile telecoms operator Nitel has not been delayed. This is despite the absence of a short-list of acceptable candidates, which had been anticipated at the beginning of the month.
South African companies that have expressed an interest in Nitel include Telkom in a joint bid with 50% subsidiary Vodacom, MTN through its Nigeria subsidiary, Mzi Khumalo's Metallon Corporation and Dimension Data.
The BPE had said it hoped to publish a short-list of acceptable candidates by 1 June after the expressions of interest had been evaluated. Each party would then be given the opportunity to conduct due diligence investigations and submit technical and financial proposals. But, this list has not been forthcoming. The BPE now says although it has finished evaluating the interested parties, it will give the 20 candidates another opportunity to 'review and strengthen" their submissions. It will give them detailed criteria and timelines, notify those who meet these by mid-July and says detailed due diligence investigations would begin immediately thereafter.
The BPE's public communications head Chigbo Anichebe said in a statement released to Moneyweb that the government agency had been 'encouraged by the level of interest shown by prospective investors from many parts of the world and has now proceeded to the pre-qualification stage of the transaction."
'With the conclusion of the diagnostic review by the advisers (BNP Paribas), the Bureau is satisfied with the transaction preparatory work and is ready to proceed with the next stage of the core investor sale process."
Anichebe says the process is still on track in terms of the originally indicated timeframe: 'The Bureau wishes to reiterate that the timetable for the privatisation of Nitel has not changed." It still anticipates this will be concluded by September this year.
Outgoing Telkom CEO Sizwe Nxasana said at the time of releasing its full-year results recently that the group was exploring entering African markets outside of South Africa including Nigeria, the Democratic Republic of Congo (DRC) and Tanzania. Speaking on the Moneyweb Power Hour at the time, Nxasana said: 'We believe that Nigeria as a country is an important growth prospect, and therefore we are going to look at various opportunities. And there are a number of opportunities in that country, even besides Nitel."
And for Vodacom, Nitel is also not the only possibility. It has also formed a consortium with Richard Branson's Virgin Group with the intention of launching a bid for number three player in the Nigerian mobile market, V-Mobile. This would, however, be subject to the outcome of court proceedings relating to minority shareholder Econet Wireless.
MTN is currently the leader in the Nigerian market, and apart from its other African interests, also announced on Wednesday that it had bought controlling of operators in Cote d'Ivoire and Zambia. This followed reports on Tuesday that MTN could be negotiating for a significant minority shareholding in an Iranian operator after the lead bidder in that privatisation exercise pulled out. The expansion activity - both confirmed and anticipated - indicates why MTN chose not to pay out a special dividend to shareholders.