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Monday, January 12, 2015

NATCOM consortium pays N14.051bn for NITEL


DigitalSENSE Business News:

In fulfillment of its first obligation, the preferred bidder of the Nigeria Telecommunications Plc (NITEL) and its mobile arm, Mobile Telecommunication (MTEL), the NATCOM Consortium, recently made a part payment of $75.75 million, about N14,051,626,202.30 billion, for the deal, reports DigitalSENSE Business News.

According to the Head of Public Communications, Mr. Chigbo Anichebe in a press statement sighted by DigitalSENSE Business News, the Bureau of Public Enterprises (BPE) said in Abuja that the payment was 30 per cent of the $252.52 million about N46,703,574,000.00 bid price for the acquisition of the assets and business units of the enterprises.

He also quoted the consortium’s lead, who is equally chairman, Skye Bank Plc, Mr. Olatunde Ayeni, as saying the offer letter to the preferred bidder which mandated NATCOM to make an initial deposit of 30 per cent of the bid price not later than 14 days on receipt of the offer letter has since been received.

DigitalSENSE Business News gathered that with this payment, NATCOM is anticipated to pay the balance of 70 per cent of the bid price within 90 days. 

“It is therefore imperative to inform creditors that disbursements to them will be considered only after full payment has been received,” BPE official said.

DigitalSENSE Business News recalls that the National Council on Privatisation (NCP) had on February 27, 2012, approved the privatisation of NITEL and its subsidiary MTEL through a term “guided liquidation.”
Experts explained that the strategy of guided liquidation was agreed by the NCP after due consideration of other options, including previously failed attempts to privatise NITEL and MTEL over Strategic Core Investor Sale and Negotiated Sale strategies as well as the huge liabilities of creditors to the tune of over N300 billion.

Under the guided liquidation strategy, DigitalSENSE Business News reports, all the core assets and business undertaking of NITEL and MTEL were to be sold as single or multiple lots to a qualified bidder by the liquidator under the general guidance of the NCP.

The bidder that acquires the assets of NITEL and MTEL will pledge to continue to operate the assets to provide telecoms services. This is as against the traditional liquidation of an enterprise by asset stripping.
Subsequently, there was advertisements for submission of Expressions of Interest (EOIs) from prospective bidders for the acquisition of the assets and business undertaking of NITEL and MTEL in both local and international newspapers by the liquidator. 

However, at the expiration date on June 30, 2014, 17 organisations and consortia submitted EOIs; and only two satisfactorily met the stipulated prequalification criteria.

DigitalSENSE Business News recollects that on September 18, 2014, the two successful applicants, NATCOM Consortium and NETTAG Consortium, reportedly met the minimum pass mark of 75 per cent pre-qualification standard and issued the Request for Proposals (RFP) which allowed them proceed to data room and due diligence stage before submission of their technical and financial proposals.

Eventually, beat the deadline of November 7, 2014 for submission of bid.

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