Abuja | Tuesday
INTERNATIONAL Investors London (IIL), the first choice bidder for the purchase of a 51% stake in Nigeria’s telecoms firm Nitel failed on Monday to meet the deadline to pay its balance, a top official said.
”The deadline expired at 12 noon today (Monday) and we have not received the balance” (of $1,185-billion, 1,352-billion euros), said the head of the Nigerian privatisation agency, Nasir el-Rufai.
”They have asked for six weeks’ extension of time but the rules do not allow for granting of an extension. We are moving on to the reserve bidder which is Telnet consortium,” led by Korea Telekom, he stated.
IIL is a Portuguese-led group.
”The rules require us to go to the reserve bidder. In the interest of transparency, that is what we will do,” said el-Rufai, director-general of the Bureau of Public Enterprises (BPE).
An official statement by the BPE said that it had obtained the approval of President Olusegun Obasanjo and the National Council on Privatisation not to grant the six-week extension being sought by IIL.
IIL said that it was requesting an extension because of delays over signing the relevant transaction documents, while also blaming the assassination of Nigerian Justice Minister Bola Ige last December.
The killing ”has accentuated the country risk of Nigeria to the highest level,” the statement said.
”If Telnet decides to take up this offer, it shall be given until February 18 to put up a five million (dollar) bond, following which BPE shall commence negotiations with Telnet Consortium on the transaction documents,” it added.
If negotiations with Telnet failed, the Nigerian government might call back IIL and grant it the six-week extension it demanded to raise the balance, it also said.
In December, under an agreement with the privatisation agency, IIL paid a first 10% — just over $130-million – of the $1,317-billion it had bid, and promised to pay the remaining $1,185-billion by February 11.
Telnet consortium had bid $1,310-billion.
The deal was to have been Africa’s largest privatisation.
The scale of the bids, with three consortiums putting in offers of between one billion and $1,3-billion, had surprised telecoms analysts who questioned how they could be financed.
Nigerian state-run Nitel, set up decades ago, has for years provided a much criticised level of service to Nigerian business and residential users and has earned itself a reputation as one of the world’s poorest performing telecoms companies.
Under the deal, once ownership has passed to the new owner, the company will have to manage the existing Nitel network, estimated at around 400 000-500 000 currently working lines, and roll out 1,4-million new lines over five years.
The company will also be required to extend a new mobile network to 1,5-million new subscribers over the same period.
Nitel was in January last year licensed by the government to operate a digital mobile network, operating alongside two new foreign-based companies Econet Wireless and MTN which began operations last August. – Sapa-AFP