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NITEL: Orascom, Newtel emerge final bidders

Posted by Oluyinka Akintunde and Everest Amaefule, Abuja on 2005/12/27 | Views: 604 |

NITEL: Orascom, Newtel emerge final bidders


Only two investors, out of the six pre-qualified for the acquisition of 51 per cent Federal Government shares in the Nigerian Telecommunications Limited and its mobile arm, Mtel, have made it to the final stages of technical and financial bids.

Only two investors, out of the six pre-qualified for the acquisition of 51 per cent Federal Government shares in the Nigerian Telecommunications Limited and its mobile arm, Mtel, have made it to the final stages of technical and financial bids.

A source, who confirmed this development to our correspondents on Monday in Abuja, named Orascom of Egypt and Newtel International as the two investors.

He said the two firms were the only bidders that met the December 16, 2005 deadline of the Bureau of Public Enterprises for the submission of bids.

“Four firms dropped out in the bid for the companies,” the source added.

The four investors that failed to submit technical and financial bids are: MTN Group of South Africa, Telkom/Vodacom Consortium from South Africa, Celtel International B.V, and Huawei/Jacuz Consortium.

The PUNCH had earlier reported that at least three of the investors had withdrawn their bids.

According to our source, the withdrawal of the four firms from the bid for NITEL/Mtel may not be unconnected with the controversy that surrounded the International Submarine Cable, otherwise known to as SAT-3.

In an interview with our correspondents on December 16, the Director-General of the BPE, Mrs. Irene Chigbue, disclosed that the telecommunication firm would be sold on Thursday, December 29.

She also revealed that the government had finally approved the sale of the company along with SAT-3, which is regarded as the cash cow of NITEL.

She stated, “Most of the bidders had threatened to withdraw and some actually withdrew. They were not patient to wait for government to take a stand to resolve the matter.

“But as you know, it has been resolved and the sale will hold on December 29, 2005. We are going to sell SAT-3 along with NITEL/Mtel.”

Our correspondents gathered that the bid documents submitted by the remaining two bidders contained detailed post-acquisition plans for the first national carrier.

BPE had required the investors to specify in the bid documents the number of shares they were willing to acquire in the telecommunication company, as well as the value of the shares.

The technical evaluation of the bidders is aimed at determining their competence. Only the successful ones will proceed to the final stage of the financial bid on December 29.

Vodacom had on October 21, 2005 pulled out of the Telkom Consortium’s bid for NITEL, because the Federal Government was not considering a separation of the fixed and mobile businesses of Nitel.

The MTN Group on December 1, 2005, indicated that it would withdraw from the bid.

Its reason was not unconnected with the initial plan to withdraw SAT-3 from the sale of Nitel/Mtel.

SAT-3, which happens to be the main attraction for many of the bidders, is a 15,000-kilometre high performance fibre optic cable that links Europe with South Africa and some West African countries.

The Nitel/Mtel transaction has been troubled by controversy and an uncertainty over whether or not to sell it with SAT-3.

While the Minister of Communications, Chief Cornelius Adebayo, is inclined towards selling the telecommunication firm without SAT-3; the industry regulator, the Nigerian Communications Commission, and the BPE are in support of its sale with SAT-3.

Another twist was added to the controversy when the NCC on December 1, 2005, said that Nitel/Mtel would not be sold to any existing Nigerian mobile licence holder.

According to the NCC, Nitel/Mtel would be sold only to an existing Nigerian Mobile licence holder on the condition that such holder forfeits the existing licence.

By implication, the MTN Group was at a disadvantage because it has a subsidiary in the country, the MTN Nigeria Communications Limited.

The PUNCH, Tuesday, December 27, 2005

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Comments (3)

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Abieyuwa(Edo, Nigeria)says...

Otasowie means evening life is better than morning life. There is an error in your “evening life is better than evening life”?

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Naija g(Houston, Minnesota, US)says...

Sokari doesn’t mean joy. Joy is Biobela. Go to the village and ask the meaning of the name.

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Fay(Katy, Texas, US)says...

Actually translates to bravehearted.