The firm was said to have emerged the preferred bidder for the Nigeria’s foremost national carrier, following the revocation of an earlier sale of the company.
Federal government had in June 2009 revoked the sale of the company to Transnational Corporation of Nigeria Plc (TRANSCORP) due to alleged inability of the core investor to adhere to the terms of the Share Sales Purchase Agreement (SSPA), non-payment of staff salaries as well as non-transformation of the once-viable company in the country.
Some Nigerian operators, involved in the consortium of New Generation Limited said the preferred bidder only showed interest in providing technical supports, saying the financing of the project would come from Dubai’s Minerva Group.
“We have a firm commitment from our investors and partners, the Minerva Group and they are working with us. We did not pull all these out of the air”, Usman Gumi, the Managing Director of GiCell Wireless Limited said in a telephone interview while adding that “We believe Nitel is worth the amount because of the infrastructure and potential that it has”.
Officials at Minerva FZ, Minerva Traders LLC and Minerva Middle East in the Dubai International Financial Centre said, they were not involved in the deal.
The National Council on Privatization (NCP) said the New Generation Telecommunications Limited. Consortium was preferred bidder for Nitel, which Nigeria has struggled to sell since its liberalization in 2001, which made it very uncompetitive.
The $2.5 billion bid, which would still need to win further government approval had surprised some sector analysts as one of the telecommunication consultants valued Nitel at over $500 million, largely due to its mobile license.
Gumi said Unicom’s European office had offered technical and managerial supports in the event of a successful bid. But Unicom spokeswoman Sophia Tso said earlier in an emailed statement that, “There’s no involvement of this project from the parent company, its listed companies or any subsidiary of the company.” Unicom is a subsidiary of New Generation Limited. The federal government is yet to react on this.
“If this is true, it discredits the Nigerian authorities and the privatization process itself. It’s not the first time they have tried to sell Nitel, which obviously doesn’t send a good signal to investors”, said analyst Thecla Mbongue of Informa Telecoms and Media Group
Nigeria has overtaken South Africa to become the biggest telecoms market in Africa with more than 62 million subscribers and one of the fastest growing in the world, making it a potentially attractive country for foreign players.
But early reports of Unicom’s participation in the Nitel bid had surprised many, as the company has little experience in overseas mergers and acquisitions.
Unicom’s state-run parent owns about 20 percent of PCCW, Hong Kong’s former telephone monopoly, but has made few if any forays outside Greater China.
Chinese telecoms carriers in general have been receptive to selling strategic stakes to other major global carriers, but have largely focused operations on their own lucrative home market, the worlds largest with about 750 million subscribers.
The reserve bidder in the Nitel sale was Omen International Ltd (BVI) with a bid of $956 million.
Meanwhile, the Director-General of the Bureau of Public Enterprises (BPE), Dr. Christopher Anyanwu, yesterday dismissed the purported withdrawal of China Unicorn (Hong Kong) Limited from the bidding exercise for the acquisition of Nigeria Telecommunications Limited (NITEL) and its Mobile subsidiary, M-TEL, saying that it was “the handiwork of a cabal”.
He explained that it was China Unicorn which said it was not part of the consortium, adding that “the cabal wanted to discredit the bidding and sale process just to see if the preferred bidder would be cancelled and they called in to take over. The preferred bidder is still intact”.
It would be recalled that through an open financial bidding exercise presided over by the Chairman of the Technical committee of the National Council on Privatisation, Mohammed Hayatu-Deen on Tuesday, the New Generation Communications Limited emerged the preferred bidder for the acquisition of NITEL and M-TEL with price offer of $2.5 billion which was the highest offer.
Dr. Anyanwu’s reaction yesterday was against the backdrop of report by a foreign media, Financial Times on Thursday alleging that the $2.5bn bid for Nitel, Nigeria’s former telecoms monopoly had been thrown into disarray when China Unicom, previously named as part of the bidding consortium, denied any involvement.
The report further alleged that the spokesman for state-owned China Unicom, China’s second-biggest telecoms carrier and listed in Hong Kong, Shanghai and New York, said the group had not been involved in any way in the bid.
The $2.5bn bid from the consortium, known as New Generation Communications Limited, was some $1.5bn more than the second-highest offer, which came from Omen International, registered in the British Virgin Islands.
The two other parties named as members of the New Generation Communications consortium – Minerva of Dubai and GiCell, a small Nigerian operator – could not be reached for comment.
But yesterday, a letter from the China Unicorn (Europe) operations Limited made available to Daily Champion titled “Re: Privatisation of Nigerian Telecommunications Limited (NITEL) reassured its commitment to the privatization process.
The Letter endorsed by its President, William So reads: “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 percent subject to final agreement with the consortium”.
It would be recalled that the Federal Government had in June, 2009 revoked the sale of NITEL and M-TEL to Transnational Corporation of Nigeria Plc (TRANSCORP) due its inability to transform the company, failure to adhere to the terms of the Share Sales Purchase Agreement (SSPA) and inability to meet its obligation to pay staff salaries.
The National Council on Privatisation (NCP) had subsequently approved that a new sale strategy of unbundling NITEL and M-Tel and allowing market forces to determine whether the enterprise would be sold as an entity or unbundled.
During the second round of the renewed financial bid opening, the Five qualified bidders namely: Brymedia Consortuim, MTN Nigeria Communications Limited, New Generations Communications Consortium (Formerly Telefonica), AFZI/Spectrum Consortium and Omen International Limited (BVI) had reviewed their first round bids to $551 million, $25 million (for SAT-3 only), $2.5 billion, $375.5 million and $956,998.091 million , respectively.
In the first round of the bidding exercise, the companies had bided thus: Brymedia Consortuim ($95,000), MTN Nigeria Communications Limited ($25 million for SAT-3), New Generations Communications Consortium ($333,333.33), AFZI/Spectrum Consortium ($200 million without liabilities and $173.333 with liabilities) and Omen International Limited (BVI) ($350 million).
Announcing the outcome of the first round of the bidding exercise, the Chairman of the Technical Committee of the National Council on Privatisation (NCP), Dr. Mohammed Hayatu-Deen explained that the NITEL and M-Tel were being sold without any liability.
Also, yesterday New Generation Consortium Limited, the Preferred Bidder of the recently concluded NITEL Bid reacted to media reports quoting China Unicom, Hong
Kong as the Preferred Bidder of the NITEL Bid.
According to the Press Statement issued by the authorized representative of New Generation Consortium Limited, Usman Gumi, the Preferred Bidder of the NITEL Bid is New Generation Consortium Limited. New Generation Consortium Limited is a consortium of several companies for the purpose of the NITEL Bid and naturally the consortium would have financial and technical partners.
According to Gumi, the financial backbone of the New Generation Consortium is
the Minerva Group of United Arab Emirates and they have what it takes to turn
around NITEL and give Nigerians good telecommunication services. The Minerva> Group, not China Unicom is the lead financial partner of New Generation Consortium Limited. Other consortium members are GiCell Wireless Ltd, a Unified Access Service Licencee, Sumatra Star GT Limited and BGL Private Equity Ltd.
China Unicom (Europe) Operations Limited who supported the bid, confirmed that
it will provide technical and managerial support and would consider a minimum of 20% equity participation on terms to be agreed.
Assuring Nigerians that New Generation Consortium Limited will turn NITEL around, Mr. Gumi noted that the consortium has several other strategic partners with whom New Generation Consortium Limited has signed Memorandum of Understanding, including GIT Affinalia in association with Ring South Europa, Spain, and Xtra Telecom/Phone House Group, FiberHomes technologies, Huawei Technologies Limited, Operators of the National Rural Telephony Program in Nigeria and China Academy of Telecommunications Technology.
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