Nitel, M-Tel face liquidation today —BPE
Published on 15 June 2011 with 1 comments
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CLEMENT NWOJI, Abuja


The Bureau of Public Enterprises (BPE) yesterday disclosed that the nation’s first national carrier on communications, Nigeria Telecommunications Plc and its mobile outfit, M-TEL may be liquidated should the reserved bidder the Omen International Consortium fails to pay $105 million security fee by Wednesday (today ).
It would be recalled that President Goodluck Jonathan had directed the preferred bidder of the Nigerian Telecommunications Ltd (NITEL) and its mobile arm, M-TEL, the New Generation Telecommunications Consortium to pay a security bid fee of $750 million.
The fee is a pre-condition for the issuance of an offer letter in its bid to acquire NITEL and M-TEL but after series of excuses, the preferred bidder failed to pay.
New Generation Consortium had emerged the preferred bidder with an offer price of $2.5 billion during the opening of financial bids for the privatisation of NITEL and M-TEL which was held on February 16, 2010 in Abuja. The reserve bidder is Omen International with an offer price of $956,996,091.
Having failed to pay, the Federal Government resorted to the reserve bidder, Omen International which ought to have paid its security bid fee asked for extension, using election as an excuse.
But yesterday, the BPE Director-General, Ms Bolanle Onagoruwa while answering questions during “Eminent Speakers Series” organised by the Securities and Exchange Commission (SEC) to enable experts highlight developments on key sectors of the economy said the reserved bidder is yet to pay.
She said, “The preferred bidder failed to pay despite several extensions. Now we went to the reserved bidder which is what the process is all about. We requested them to pay the bid security which comes up to $105 Million and they also asked for extensions.
“They claimed that it was the elections that their investors or their financiers were worried about the stability of the Nigerian government and so on. They said that it was after, they should be given up to June 10, 2011 to pay this $105 Million but June 10th was Friday.
“As of Friday, they brought a letter to my office saying that they had transferred the money and that we should expect to receive in our account by Wednesday. So, what we are now doing, we are checking our account. They money supposed to have hit our account before Friday I must say.
“But we want to give them up to that Wednesday to see if the money will come. We already know what to do if by Wednesday the money is not in; transaction closes and then we move to the next stage.
“We have various ideas we have thought about. One of them is liquidation or what we call guided liquidation. What it entails is that the enterprise is liquidated but it is not broken up. It has certain benefits and that is to make sure that the money realised is enough to settle all its debts.
“The other consideration is negotiated sales. It means that we go to the market and look for some big players that have the financial clout and technical ability and get it out of your hands.”
Also, while making a presentation, the Chairman of the Presidential Task Force on Power, Professor Bart Nnaji revealed that only 40 percent of the nation’s population have access to electricity supply about from high operating cost of over N8 Billion while more than 80 percent goes into staff salaries and welfare.

http://www.champion.com.ng/displaycontent.asp?pid=9070

FG cancels Nitel/Mtel sale
From ISAAC ANUMIHE, Abuja
Thursday, June 16, 2011

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The Federal Government has cancelled the privatization exercise for NITEL/MTEL following the inability of the reserve bidder, Omen International Consortium to revalidate its bid bond of $105 million, at the deadline of June 10, 2011. It would be recalled that the privatization of the telecoms utility began in 2009.

As a result of this development, the Bureau is exploring various options to consummate the sale of the telecommunications company. The BPE said it considers it apt to clarify various media reports attributed to its Director General, Ms. Bolanle Onagoruwa, regarding the various options being considered in addressing the NITEL challenge. The Director General was emphatic in saying that while several options, which included amongst others, liquidation and negotiated sale, were under consideration, the Federal Government had not yet taken a decision as to which of the options to pursue.?

It would be recalled that following the failure of the preferred bidder, New Generation Consortium, to pay 30 per cent security bid of its $2.5 billion bid offer, the reserve bidder, Omen, was thereafter called upon to revalidate its bid bond.?The deadline granted to the reserve bidder, Omen International Consortium, to revalidate its bid bond was Friday, June 10, 2011. In spite of a grace period granted till close of business on Wednesday, June 15, 2011, payment was not received. Thus, the transaction was therefore closed.

The BPE had written to the Omen Consortium in March asking if it would be interested in revalidating its original February 2010 offer of $959 million after the preferred bidder missed several payment deadlines. The agency said in April Omen had two weeks to respond but Onagoruwa said it had subsequently written a letter to promising to pay the bid security.

The government has been trying to sell Nitel for almost a decade, struggling mainly because of the sorry state of its fixed-line infrastructure and high levels of debt.Its fixed lines have fallen to fewer than 100,000 from five times that number in 2001 and subscribers to its MTEL mobile unit have dropped to a few thousands from over 1 million.

At the financial bid opening held by BPE on February 16, 2010, First Generation Consortium had emerged the preferred bidder with an offer of $2.5bn while Omen International Consortium emerged the reserved bidder with an offer of $956million.

However, BPE had recently terminated the bid of First Generation Consortium following the inability of the company to meet the revised deadline for the payment of 30 per cent of its $2.5bn offer. The privatisation agency also invited Omen to revalidate its interest in acquiring majority stake in the telecommunications company. The revalidation of interest was intended to enable the Federal Government to invite Omen to enter into negotiation with the consortium. Omen also failed to seal the deal.

Source: http://www.sunnewsonline.com/webpages/news/national/2011/june/16/national-16-06-2011-002.html

Finally, Nitel/Mtel Privatisation (sales) fails to sail through. Glo would have paid if they had allowed them during the process of the bidding in 2010. The failure of Nitel/Mtel is the failure of Government.

BPE begins fresh negotiation on NITEL

By Emma Okonji Head, IT. Telecom


Following the final cancellation of the sale of NITEL by the Bureau of Public Enterprises (BPE), the agency said it would commence fresh negotiated sale on NITEL, subject to the approval by the Federal Government.

According to BPE’s Director General, Ms. Bolanle Onagoruwa, “BPE is considering complete liquidation of NITEL and the re-opening of a negotiated sale, as against the bidding procedures that had long been adopted by BPE.”

Although the decision to commence negotiated buying is subject to approval by the Federal Government, recent developments in the sale of NITEL showed that the bidding procedures for the sale of the moribund company is already failing BPE and the agency is worried over the unnecessary delays in the sale since 2000, when government initially penciled down the nation’s national carrier, among other ailing parastatals for sale.

BPE decided to cancel NITEL sale following the inability of Omen International Consortium, the reserve bidder to revalidate its bid bond of $105 million, at the deadline of June 10, 2011.

The Director General was emphatic in saying that while several options, which included amongst others, liquidation and negotiated sale, were under consideration, the Federal Government had not yet taken a decision as to which of the options to pursue.

It would be recalled that following the failure of the preferred bidder, New Generation Consortium, to pay 30 percent security bid of its $2.5 billion bid offer, the reserve bidder, Omen, was thereafter called upon to revalidate its bid bond.

Spokesman for BPE, Mr. Chukwuma Nwokoh said the deadline granted Omen International Consortium, to revalidate its bid bond was June 10, 2011 and that in spite of a grace period granted till close of business on June 15, 2011, payment was not received, thus leading to the close of NITEL.

BPE had on February 16, 2010, opened financial bids of five prospective investors that were pre-qualified to bid for the acquisition of the most recent sale of NITEL.

At the event, New Generations Telecommunications Consortium bid $2.5 billion (N375 billion) for unbundled NITEL to emerge the preferred bidder while Omen International offered $956 million for NITEL as a whole to become the reserve bidder.

The other bidders were Brymedia Consortium which offered $551 million (NITEL as a whole); AFZI/Spectrum Consortium with an offer price of $375.5 million (NITEL as a whole); and MTN Nigeria Communications which bid $25 million (for only SAT-3.).

When it was clear that Omen International was not ready to open negotiations with BPE, as requested by the BPE, it was gathered that the third bidder, Brymedia Consortium raised its bid to $600 million to take over NITEL, but such new arrangement from Brymedia Consortium was not welcomed by BPE.

http://www.inlng.com/DailyIndependent/Article.aspx?id=35669