Nigeria: NITEL may be bought after all

There are signs that the troubled sale of state-owned telecommunications company, Nigerian Telecommunications Company (NITEL), is finally making progress after the failure of an earlier attempt at divestment.

Mike Adenuga, the prominent business mogul and owner of Globacom, the operator of Nigeria's first indigenous GSM network, is reportedly in the process of making a US$450 million bid for the moribund NITEL and its mobile arm, MTel, which has been an albatross around the neck of the Federal Government since it started to privatise State-owned entities.

In the past few years, the Bureau of Public Enterprise (BPE) has made about five unsuccessful attempts to sell off the State-owned telecommunications company. The most recent attempt collapsed when the winning bidder, the New Generations Telecommunications Consortium, failed to meet the financial requirements of the sale. The reserve bidder, Omen International, quickly followed suit.

It is expected that a sale to Adenuga, if it goes through, would be conducted under the “willing purchaser/willing vendor” clause of the BPE's terms of sale instead of going through the usual auction route, which has so far failed to deliver results.

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.

© 2011 Menas Associates

Nigeria: New Generation's Nitel bid approved

Goodluck Jonathan has finally given his stamp of approval to the $2.5 billion bid by the New Generation Telecommunications Consortium for moribund state-owned Nigerian Telecommunications ompany (NITEL) and its mobile arm, M-Tel.

The president's approval is pursuant to the recommendation of the National Council on Privatisation (NCP), following the outcome of its investigations into the auction for NITEL in February this year due to controversies over the emergence of New Generation as the preferred bidder.

The president's approval includes a proviso, in line with the provisions of the bid's RFP, that the consortium (whose financial partner is Dubai-based Minerva Group) must pay a bid security of $750 million as a pre-condition for the issuance of an offer letter. The balance of $1.75 million must be paid within 60 days from the issuance of the letter.

The reserve bidder for the auction remains Omen International, with a bid price of $956,996,091.

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.

© 2010 Menas Associates