The privatisation of struggling Nigerian operator Nitel, and its mobile arm M-Tel, has attracted 17 potential bidders, according to the Bureau of Public Enterprises (BPE).
BPE director general Benjamin Dikki was quoted telling reporters that a total of…
The privatisation of struggling Nigerian operator Nitel, and its mobile arm M-Tel, has attracted 17 potential bidders, according to the Bureau of Public Enterprises (BPE).
BPE director general Benjamin Dikki was quoted telling reporters that a total of 22 investors actually expressed interest but five did so after the 30 June deadline.
The bidders are now being evaluated, Dikki said, according to local newspaper the Daily Independent.
In early June, the government-appointed liquidator called for potential investors to express their interest in the company in a new attempt to turn it around.
The government has tried to privatise Nitel on several occasions over the past decade.
In June 2011, a sales attempt was shelved after the reserve bidder, a consortium of China Unicom and FiberHome Technologies, failed to make a first payment.
A ‘willing buyer, willing seller’ approach for the sale of a 75% stake in Nitel and M-Tel, announced by Nigerian president Goodluck Jonathan in early July 2011, also failed to find a buyer.
In early 2013, the National Council on Privatisation decided to sell the company again via a liquidation route. The government chose this option because proceeds from the sale are expected to be less than the value of its liabilities, estimated at around NgN350bn (US$2.16bn).
However, Analysys Mason principal Robert Schumann believes a privatisation may not be the best option.
“After 10 years on life support, it is difficult to verify what assets Nitel actually has,” he said.
“Rather than selling it as a single going concern, as the liquidator appears to intend, other options may have been better, such as regional management buyouts supported by local investors.”
Schumann also questioned whether Nitel would still be able to attract “credible investors”.
According to an advert published by the liquidator in June, interested bidders must have at least five years of telecoms experience and a net worth of more than US$200m.
The liquidator also stressed that Nitel and M-Tel, as well as some of their assets, can be sold separately. Suitors interested in Nitel must have at least one million subscribers on their fixed network while those applying for M-Tel will need at least 10 million subscribers on their mobile network.
The transaction is scheduled to close in December.
