NATCOM Consortium Completes Payment for NITEL/MTEL

Director General of BPE, Mr. Benjamin Dikki

By James Emejo

The preferred bidder for Nigerian Telecommunications Limited (NITEL) and its mobile arm (Mtel), NATCOM Consortium, has paid the 70 per cent outstanding balance of the $252,521,000 bid price for the acquisition of the assets and business units of the telecoms enterprises.

Effectively, the consortium has paid the remaining $176,575,700 (N29,696,469,600) after an initial payment of $75,756,300 (N12, 727,058,400) being 30 percent of the bid price on January 6, 2015.

The installment was in line with the offer letter by the Bureau of Public Enterprises (BPE), which mandated NATCOM to make an initial deposit of 30 per cent of the bid price not later than 14 days from the date of the offer letter.

NATCOM's completion of payment for the bid price was conveyed in a statement signed by BPE's spokesman, Mr. Chigbo Anichebe. The statement confirmed that the remaining 70 per cent payment had been effected on April 2, 2015, four days ahead of the April 7, 2015 deadline for payment.

Meanwhile, Director General of BPE, Mr. Benjamin Dikki had told THISDAY in an interview that selling the telecommunications assets for $252 million was the best deal for the transaction.

He said:"We should be receiving accolades for being able to market Nitel and get people to be interested to pay that kind of money for a dead company that is not operational. If you ask me, I think Nigerians have gotten the best deal they can from this transaction.

"There's no single infrastructure of Nitel today that is functional. And then we succeeded in selling this company for $252 million in 2015 and nobody is giving us national honours for achieving this feat-I am worried.

According to him, "In 2001, a fully operational NITEL, with its mobile arm, Mtel-with everything functional was sold for $1.1 billion-I want you to compared carefully; In 2005, when NItel had undergone some level of dilapidation because since ILL could not pay, government was not making additional investment in NItel-it deteriorated and in 2005, in a competitive bidding process, Orascom that is an international telecom operator bought Nitel for $256 million."

He said: "Government told Orascom to increase its bid, they refused and walked away and said if you don't sell Nitel to us at $256 million which is the value we think Nitel is worth as at that time-and the mobile networks were working, the landlines were working and the international gsm were all working-$256 million in 2005. Then Transcorp took over and could not inject the necessary capital. And by the last five years, Nitel had completely shut down."

He spoke against the backdrop of criticisms that the assets may have been grossly undervalued.

It would be recalled that the National Council on Privatisation (NCP), at its meeting of February 27, 2012, approved the privatization of Nigerian Telecommunications Plc (NITEL) and Nigerian Mobile Telecommunication (MTEL) through “guided liquidation”.

The strategy was adopted by the Council after due consideration of other options and inlight of the previous failed attempts to privatize NITEL and MTEL through Strategic Core Investor Sale and Negotiated Sale strategies and the huge liabilities to creditors to the tune of over N300 billion.

Under the guided liquidation strategy, all the core assets and business undertakings of NITEL and MTEL were to be sold a qualified bidder by the Liquidator under the general guidance of the NCP.

Thus, 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 assets stripping.

Consequently, advertisements for submission of Expressions of Interest (EOIs) from prospective bidders for the acquisition of the assets and business undertakings of NITEL and MTEL were placed in both local and international print media by the Liquidator. At the closing date on June 30, 2014, seventeen (17) organisations/consortia submitted EOIs of which only two satisfactorily met the stipulated criteria for pre-qualification.

On September 18, 2014, the two successful applicants, NATCOM Consortium and NETTAG Consortium, that met the minimum pass mark of 75% were pre-qualified and issued the Request for Proposals (RFP) and allowed to proceed to data room and physical due diligence stage prior to preparation and submission of their technical and financial proposals.

The deadline for submission of technical and financial bids was Friday, November 7, 2014. The two pre-qualified bidders, NATCOM Consortium and NETTAG Consortium, submitted their technical and financial bids before the expiration of the deadline. The technical bids received from the two bidders were evaluated.

Unfortunately, one of the two pre-qualified bidders, NETTAG Consortium, was disqualified for failure to enclose a bid bond as clearly stipulated in the RFP.

Following the disqualification of NETTAG Consortium, only the financial bid of NATCOM Consortium qualified for opening on December 3, 2014; having scored an average of 92% in its technical proposal which was above the minimum pass mark of 75%, and had also satisfied the requirement of a valid bid bond.

Accordingly, the financial proposal of NATCOM Consortium was publicly opened on Wednesday, December 3, 2014 which it won with a bid price of $252.25m.

Consequently, the Consortium, on Monday, December 22, 2014 in Abuja, signed the Assets Sale Agreement and obtained the Offer Letter from the Liquidator ofNITEL/MTEL and the Bureau of Public Enterprises (BPE).
The companies would be handed over to the NATCOM Consortium after the approval by the NCP.