Tuesday, February 23, 2010

China Unicom denies link with New Generation Consortium

… BPE says ‘they are free to pull out’

Barely a week after the latest sale of the first national carrier, Nigerian Telecommunications Plc (NITEL), the company seems to be jinxed with controversies, as the purported technical partner of the preferred bidder New Generation Consortium Limited, the China Unicom has denied having any deal with the bid or any Nigerian company.

This is coming as the agency in the centre of the privatization of NITEL, the Bureau of Public Enterprises (BPE) said they are free to pull out of a consortium.
A report by Reuters on Monday, quoted officials of China Unicom as saying that they did not participate in any deal either directly or indirectly in the recently concluded NITEL bid.

"The company has not participated in any direct discussions or negotiations with any relevant parties involved in the proposed privatisation," China Unicom said in a press statement.

The officials were also quoted as watching the development in the Nigeria’s telecommunication scene.

"The company will continue to observe the development of the proposed privatisation, and will make announcements as and when appropriate," part of the report read.
Also, the report noted the concern of China Unicom over recent media reports it was participating in the proposed privatisation and said it had not authorised any person to comment on the deal.

Unicom's remarks are the latest twist in Nigeria's ongoing effort to sell its former telecoms monopoly, Nitel.

The National Council on Privatisation, responsible for privatising Nitel, said last Tuesday that a consortium including China Unicom had bid $2.5 billion for Nitel, through New Generation Consortium.

The managing director, GiCell, Alhaji Abubakar Gumi reacted by saying, "We didn't pull all this out of the air." And provided copies of a letter that allegedly came from Unicom's European unit in this regard where the company expressed willingliness to be a technical partner to the consortium and would consider equity participation of 20 percent or more.

Meanwhile, the Bureau of Public Enterprises (BPE) said its attention was drawn to publications in the media to the effect that China Unicom, named as a member of the New Generation Telecommunications Limited Consortium that won the bid for NITEL/MTEL, has denied any relationship with the consortium.

Head, Public Communication at BPE, Mr. Chigbo Anichebe, noted in a press statement made available to ITRealms Online, Monday and dated February 19, 2010, that while it was not BPE intention to join issues with anybody, the agency reiterated that the latest bidding process was a success.

“We wish to state categorically and for the records that the NCP/BPE stands firmly by the results of the open and transparent bid process of NITEL/M-TEL held on the 16th February 2010. We have not seen any evidence to the contrary,” he said.

Additionally, he said that it is important to note, “That when the Technical bids were received on 5th February 2010 and opened by the Bureau of Public Enterprises on 16th February, 2010, New Generations Communications Limited Consortium included as part of its submission a ‘Commitment Letter’ from Minerva Group signed by the Group Chairman, Ahmed Abdullah, accepting to fund the acquisition and another letter from China Unicom (Europe) Operations Limited, accepting to be its Technical Partner.

BPE quoted from the China Unicom’s letter signed by one William So as follows:
“We are pleased to inform you that we are willing to be technical partner to support New Generation Telecommunications Limited Consortium to bid for NITEL, and to provide technical and managerial support on terms to be agreed later, when the bid is finally won. We will also consider equity participation of not less than 20% subject to final agreement with the consortium.”

The agency further said that the letters in reference were immediately sent to its advisors BNP Paribas for conduct of due diligence and confirmation of the validity of the letter. According to Anichebe, BNP Paribas called Mr. Williams So, on phone and he confirmed the relationship by e-mail (sow@chinaunicon.cn), of which part of the content extracted thereof: “We have provided a letter to a member of the New Generation Telecom Consortium to confirm that we are willing to provide technical and managerial support to them on terms to be agreed later, when the bid is finally won. I believe you have a copy of the letter.”

He pointed out that it is important to note that telecommunications operators were not required to submit technical partnership agreements since they already have the technical competences required to run telecommunications operations.

“Thus MTN, GLO and New Generation Telecommunications Limited were not required to submit memorandums of understanding (MoU) with technical partners since they were either telecoms operators or have an operator in the consortium,” he said, stressing that New Generation Telecommunications Limited has Gicell, a licensed local operator, in its consortium. The additional commitment of China Unicom only served to strengthen its bid.

However, he explained that the other bidders that were not telecommunications operators were required to have duly executed MoUs with a telecoms operator. In compliance with this requirement, Afzi/Spectrum Consortium, Brymedia, and Omen International were therefore required to submit MoUs executed by operators to qualify for the bid opening.

“It must be pointed out that a member of a consortium that wishes to pull out of the consortium is free to do so by writing to the BPE and other members of the consortium the same way it wrote to confirm its membership and not by dramatizing its exit in the media,” he cautioned.

Reassuring that BPE is committed to an open and transparent reform and privatization process will not waver.

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