Business
Local investors are interested in buying over NITEL
By
Jan 9, 2006, 19:11

Indications that government might cancel the bid for the 51 per cent controlling stake in the Nigerian Telecommunications Limited, due to the unacceptably low bid price offered by shortlisted firms, seemed to have awaken local investors to prepare to tender bids for the management of the firm.

Investigations by our correspondents showed that about three firms are preparing grounds for a possible takeover of the First National Operator following the unpopularity of the recently concluded bid session conducted by the Bureau of Public Enterprises.

One of the likely firms that could bid for the NITEL include a firm to be floated by Jimoh Ibrahim, Chairman of the Global Fleet Group and a local telecom firm, whose identity is yet to be fully ascertained.

Transcorp, a multi-sectoral investment firm floated by top industry players, is also said to be strongly considering the prospects of making a bid for the FNO.

While Transcorp is in partnership discussions with a leading telecommunications services company, given that it does not have telecommunications experience, indications are that the local telecommunications firm is also seeking to make a bid and might partner with foreign investors in the planned takeover of NITEL.

Oil magnate, Mr. Jimoh Ibrahim, had given indications on Tuesday that he might bid for the ailing national operator, if government cancels the bid. He said this informed his decision to put his firm’s bid for VGC Communications on hold.

It would be recalled that Global Fleet Group deal for VGC Communications was offered following the failure of the oil firm to meet the December 21 deadline set for the transaction to be completed.

Stating reasons for the possible bid, the Chief Executive Officer of one of the interested telecoms firms said his organisation had proven its worth over the years and was now ready to take its expertise into managing the national operator.

According to him, the interest of his firm is borne out of the fact that a negative impression has been created by the low bid price that NITEL is a worthless firm and that the country was in a desperate situation to sell it off.

He said, “We should not sell Nigeria so cheaply,” and hinted that once government cancels the bid as being suggested, the company would make a bid for NITEL and within one and a half years make the company ready for an IPO.

According to him, the firm has already mapped out its strategy for the FNO, which would be implemented immediately the government’s position becomes clear.

“We are discussing with Transcorp on the matter and we will assemble a team of Nigerian experts with a plan to stabilize the company and prepare for Initial Public Offer within one an half years,” said an official of the telecoms firm.

In the final bid round for NITEL, Orascom Telecom of Egypt on December 31, 2005 offered what is generally considered a paltry $256.53million to emerge as the preferred bidder for 51 per cent stake in the Nigerian Telecommunications Limited.

But its victory raised the possibility of another fiasco in the long-running attempt to privatise the first national telecoms carrier.

In 2002, a consortium of local investors under the name, International Investors London Limited, had tabled a $1.317billion winning bid for NITEL. However, the inability of the group to come up with cash to back up its bid, despite paying up the initial non-refundable $131.7million, made that attempt to fail. Since then, NITEL has been through many troubled waters including its management by a Ducth-registered firm, Pentascope International.

Although the Bureau of Public Enterprises declared Orascom winner in the final two-way bidding held in Abuja, it said the bid price offered was far below the reserve price set for the FNO. The second final contestant in the bidding, Newtel International of India, failed to show up at the Transcorp Hilton Hotel, venue of the opening of the financial bids.

Besides the private investors seeking to take over the firm, other options have also been suggested by stakeholders on the way out of the present stalemate.

General Manager of VGC Communications Limited, Mr. Gbenga Adebayo, wants the firm to be unbundled.

However, workers of the Nigerian Telecommunications Limited have suggested that the organisation be sold to Nigerians through an initial public offer on the floor of Nigerian Stock Exchange.

The workers, under the aegis of the National Union of Post and Telecommunications Employees and the Senior Staff Association of Utilities, Public Corporations and Government-Owned Companies, gave the suggestion as a panacea to the current problem surrounding the privatisation of the national carrier.


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