Posted by Oluyinka Akintunde and Everest Amaefule, Abuja on
The two investors bidding for the acquisition of 51 per cent Federal Government shares in the Nigerian Telecommunication Limited and its mobile arm, Mtel, have paid a non-refundable bid bond of $20million (about N2.6billion) each totalling $40million (about N5.2billion) in their quest to acquire the company, the Bureau of Public Enterprises confirmed on Wednesday.
The two investors bidding for the acquisition of 51 per cent Federal Government shares in the Nigerian Telecommunication Limited and its mobile arm, Mtel, have paid a non-refundable bid bond of $20million (about N2.6billion) each totalling $40million (about N5.2billion) in their quest to acquire the company, the Bureau of Public Enterprises confirmed on Wednesday.
The PUNCH had exclusively reported on December 27 that Orascom Telecom Holding of Egypt and Newtel, a local and foreign investors' consortium, made the final stages of technical and financial bids.
Investigations by our correspondents on Wednesday also revealed that both Orascom and Newtel have common ownership.
A highly-placed official of the bureau, who confirmed the payment of $40million by the two investors, also revealed that both scored above 70 per cent in the technical evaluation to make it to the financial bid opening, which will hold on Thursday (today) at the Transcorp Hilton Hotel in Abuja.
The source said that the eventual winner of the bid for NITEL/Mtel was expected to pay 50 per cent of the bid price within 15 working days and the balance within three months of the bid opening.
The bid price, according to the source, is expected to be paid into a BPE account, which will then be wired into a Central Bank of Nigeria account.
"Orascom and Newtel are the only two investors now qualified for the financial bid opening on Thursday, having scored above the cut off point of 70 per cent during the technical evaluation," the source added.
Four firms that had earlier undertaken due diligence on NITEL failed to meet the December 16, 2005 deadline for the submission of bid document for the first national carrier.
The affected firms include MTN Group of South Africa, Telkom/Vodakom Consortium from South Africa, Celtel International B.V. and Huawei/Jacuz Consortium.
As at 7.00pm on Wednesday, the Director-General, BPE, Mrs. Irene Chigbue, and other top officials of the bureau were still having a meeting with the two final bidders for NITEL/Mtel, towards resolving some issues.
A source told our correspondents that the meeting, which was at the behest of the investors, was to address the issue of NITEL's 2005 Account.
The source added, 'The meeting is to see state of readiness of the two investors. The meeting will discuss the issue of NITEL account for 2005. The account is a management account; we are yet to receive the audited account for 2005.
"The investors want an assurance that the Federal Government will take full responsibility if there are material differences in the NITEL account. We are confident that there will be marginal errors in the NITEL account. And this is what the BPE is informing the investors at the meeting."
The BPE official also confirmed that President Olusegun Obasanjo had approved the sale of NITEL/Mtel along with the submarine cable popularly known as SAT-3.
Investigations by our correspondents, on Wednesday, also revealed the profile of the partners behind the two investors.
While Orascom Telecom Holding (OTH) is bidding alone for NITEL/Mtel, Newtel is a consortium that comprised both Nigerian and Indian investors.
BPL Mumbai India, a licensee for Global System for Mobile-communication mobile services in the telecommunication circle of Mumbai in India, is a major partner in Newtel, having 51 per cent shares in the company. Other partners in the company include: Macquarie Bank, EFG-Hermes and some yet to be identified Nigerian investors, who own 38.5 per cent shares of the consortium.
However, Hutchison Essar, a subsidiary of Hutchison Telecom International Limited acquired BPL Mumbai and the entire issued share capital of BPL Cellular, a licensee for GSM mobile services in the telecommunication circles of Maharashtra, Tamil Nadu and Kerala in India. The consideration of the sale was US$1.1billion.
BPL Indian operation is within the overall Hutchison operations, Hutchison Essar is owned two-third by the Hutchison telecom group and one-third by Essar, an Indian conglomerate with main interests in steel manufacturing, oil related equipment and oil production.
Macquarie Bank combines a large merchant banking activity with a focus on project financing, with a large private equity management activity.
EFG-Hermes was established in 1984. In July 1998, EFG-Hermes went public with a US$50million GDR offering and now boasts a market capitalisation of nearly US$1billion.
However, a press statement on the website of Orascom Telecom on December 21 showed that Orascom Telecom has acquired a strategic stake in Hutchinson Telecom, the major partner in the Newtel consortium.
Hutchinson website also confirmed the acquisition of the shares by Orascom but could not give details of the transaction.
Dow Jones, a news agency, however, reported that Orascom purchased 19.3 per cent interest in Hutchinson Telecom from its parent company, Hutchinson Whampoa at a price of $1.3billion.
The companies also signed a cooperation agreement to align their respective interests and to exploit synergy between their businesses. It is not yet clear how this cooperation agreement will play out in both firms' interests to acquire NITEL on Thursday.
Orascom Telecom Holding S.A.E. known as Orascom Telecom or OTH was established in 1998 and had grown to become a major player in the telecommunication market in the world.
OTH is majority controlled by the Sawiris family whose shareholding is 56.5 per cent of the group, while the 43.5 per cent remaining shares are listed on the Cairo and Alexandria Stock Exchange Market, and London Stock Exchange Market.
OTH, which has staff strength of 15,000, is considered among the largest and most diversified network operators in the Middle East, Africa and Pakistan.
It is a leading mobile telecommunications company operating in seven emerging markets in the Middle East, Africa and South Asia having a population under license of 460million in total population with an average penetration of mobile telephony rate across all markets of 11.5 per cent.
Orascom Telecom operates GSM networks in Algeria ("Djezzy"), Egypt ("MobiNil"), Pakistan ("Mobilink"), Iraq ("IraQna"), Bangladesh ("Banglalink"), Tunisia ("Tunisiana") and Zimbabwe ("Telecel Zimbabwe"). Orascom Telecom subscriber number reached over 25.5 million subscribers as of September, 2005.
MobiNil, in Egypt was Orascom Telecom's first operation. The Egyptian Company for Mobile Services (ECMS) was granted a GSM license in 1998 and launched the same year. MobiNil is among Egypt's five largest companies by market capitalization. It is also among Egypt's five most heavily traded companies by value. MobiNil's network covered approximately 91% of the total population of Egypt as of March, 2005.
"MobiNil Life" was launched in September 2003 in partnership with sister companies ARPU+ and LINKdotNET which cater to value added services and internet respectively. MobiNil offers both prepaid and postpaid packages and as of September 2005, prepaid subscribers represented approximately 85% of MobiNil's total subscribers. MobiNil served approximately 6 million subscribers as of September, 2005, representing a market share of approximately 53% of the Egyptian mobile market.
Orascom Telecom's North African success continued in Algeria and Tunisia as well. Djezzy, OTH's network in Algeria, was granted a license in July 2001 to operate a nationwide GSM telecommunications network, to provide a range of mobile services in Algeria. Djezzy's network serves over 6 million subscribers, as of September, 2005 representing a market share of approximately 64% of total mobile subscribers in Algeria. Orascom Telecom's Algerian operation was the second GSM telecommunication network to operate in Algeria.
The PUNCH, Thursday, December 29, 2005