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Wednesday, January 11, 2006

Global Fleer chairman, Jimoh, eyes NITEL, pulls out of VGC

Indications are that an Ondo State-born business mogul and chairman of Global Fleet Group, Mr. Ibrahim Jimoh, is making moves to acquire the embattled national carrier, the Nigerian Telecommunications Limited (NITEL).
Daily Champion gathered that this target shifted Jimoh’s attention from the already advanced plan to buy over VGC Communications, which process was on course since last quarter and following the failure to sale NITEL, his chances seem bright.
VGC Communications, also known as VGCCL, is a limited liability company licensed by the Nigerian Communications Commission (NCC) to provide cabling and radio telephone services nationwide and has laid extensive fibre optic cables, and internet service provision.
Daily Champion recalls that last month, Orascom Consortium of Egypt under priced NITEL to the tune of $256.5 million which is far less what the carrier paid for its subsidiary, the Mobile Telecommunications (MTel) arm to acquire its Global System for Mobile communication (GSM) license five years ago.
This pull out, our source said, was a tactical manoeuvre to consolidate his resources for a successful challenge for the NITEL.
Also, the pull out was attributed to the suspected discovery by Global Fleet that VGC was actually over-valued as some of the claims on due diligence could not be supported by facts on the ground.
Efforts to contact the General Manager, VGC Communications, Mr. Gbenga Adebayo was not successful as all his telephone lines including mobile were not getting through at the time of going to the press.
It was also alleged that the business mogul have preference of NITEL to VGC, due to its position as a national carrier even as it claims proper due diligence had been carried on the teleco owned 51 per cent by the government, over and over.
"I have seen a few media reports suggesting that Global Fleet could not beat the December 31, 2005 deadline to make full payment for VGC, but as someone with inside knowledge of the transaction, I can tell you that that was far from the truth. Jimoh simply turned his attention to NITEL," our source said.
According to the source, Jimoh’s interest in NITEL was spurred by the realization that bids made so far were largely by foreign companies whose offers have not been quite impressive.
Global Fleet it was equally gathered has lined up a package to outweigh even government’s benchmark on its efforts to privatize NITEL.
Our source also said that Jimoh and company did not withdraw from the VGC deal due to lack of fund and inability to meet the December 31 deadline for pay-up.
Stressing that Mr. Jimoh realized that the amount involved in the VGC deal would be a better investment in NITEL.
It is on record that last year, Global Fleet had bought over the four star Meidan Hotel at the Victoria Garden City, Lagos, hitherto owned by the VGC Group, NICON Insurance Corporation and Great Nigeria Insurance (GNI) to name a few.

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