The Nigerian Bureau of Public Enterprises (BPE) has dismissed claims of controversy or confusion over the privatisation of Nitel, despite continuing doubts surrounding the process.
Since New Generation Telecommunications (NGT) was announced as the…
The Nigerian Bureau of Public Enterprises (BPE) has dismissed claims of controversy or confusion over the privatisation of Nitel, despite continuing doubts surrounding the process.
Since New Generation Telecommunications (NGT) was announced as the preferred bidder with an extraordinary bid of US$2.5bn last week, multiple question marks have emerged over the bid’s puzzling price, and over the consortium’s identity and ability to pay such an amount.
Now, more uncertainty is setting in after local reports said the shortlisted bid could be revoked, while others say a federal court injunction has been issued to block the process.
BPE spokesperson Chigbo Anichebe told TelecomFinance the BPE was not aware of either of these claims.
However, the country’s turbulent political situation could add to the debacle by delaying the bid’s approval by the National Council of Privatization, the body which oversees the BPE. Indeed, the chair of the council is Goodluck Jonathan, the country’s vice president who has now been named the country’s acting president. As a result, Jonathan’s time is likely to be restricted and the council’s decision is likely to drag on, Anichebe said.
If the council approves the bid, NGT will have 10 days to pay 30% of their purchase bid, and another 50 days to pay the rest.
NGT is led by GiCell Wireless, a local rural operator founded in 2006. Speaking to TelecomFinance last week, its CEO Usman Gumi insisted that the consortium would be able to fund a bid of US$2.5bn. Gumi said that 51% of the offer’s equity would come from a Dubai investment firm called Minerva Group, while China Unicom Europe would participate as technical partner and by contributing around 20% of equity.
The remaining funds, he said, would come from new loans and credit agreements to be secured with Nigerian banks, including the consortium’s advisors BGL, once the bid is approved. The CEO, which described GiCell’s owners as Nigerian individuals, said he had received multiple expressions of interests from potential backers.
Gumi also sent what looks like an apparent copy of GiCell’s agreement with China Unicom Europe, in which the Chinese operator agrees to act as the consortium’s technical partner and take a 20% share of equity.
China Unicom Europe and its president William So have not been available for comment.
Meanwhile, Gumi would not reveal details over the Minerva Group and efforts to track the company – which is reportedly based in the UAE and invests across a range of sectors – have proved fruitless.
NGT’s offer seems astronomical considering the disastrous state of Nitel, and other bidders were more in line with expectations by bidding between US$375.5m and US$956m for the same assets. However, Gumi dismissed any overvaluation, saying the bid was reasonable when compared to the value of a pure GSM licence – US$400m.
GiCell names Sumatra Star GT and BGL as consortium members, and says strategic partners also include GIT Affinalia, Huawei and the China Academy of Telecommunications Technology.
A consortium led by BNP Paribas and Eleda Capital Partners are advising the BPE on its decision.
