A Special Purpose Vehicle, NATCOM Consortium, on Wednesday offered to pay $252.25m for the Nigerian Telecommunications Limited and its mobile subsidiary, the Nigerian Mobile Telecommunications Limited.
With no competitor, and with the offer meeting the reserve price set for the telecommunication companies, NATCOM stands as the potential core investor in the beleaguered public telecommunications companies.
Two more hurdles, however, are ahead to be cleared. First, the bid has to be approved by the National Council on Privatisation chaired by Vice President Namadi Sambo; and the second is the consortium should be able to pay within the specified time.
The other firm that had been prequalified for the exercise, NETTAG Consortium, was disqualified for failure to enclose a bid bond stipulated by the Request for Proposal prepared by the Bureau of Public Enterprises.
At the first bid, NATCOM offered a bid of $221m which was said to be lower than the reserve price. It was therefore asked to reverse the bid and in the second round, it offered the winning bid of $252.25m.
NATCOM is an SPV formed for the purpose of acquisition of NITEL and M-Tel. The consortium is made up of shareholders – NATSPACE Telecommunication Investment Limited, PCCW Global Limited and Prime Union Investment Limited.
Other members of the consortium are Prime Union Investment Limited, Olutoyl Estate Development & Services Limited, Sahara Energy Resources Limited, Legal Resources Alliance & Co and LM Ericsson Nigeria Limited.
With the exception of LM Ericsson Nigeria Limited, all the other members of the consortium are equity holders with Prime Union and Olutoyl Estate holding 30 per cent equity each. LM Ericsson is a technical partner to the group.
Four of the equity holders, Prime Union Investment Limited, Olutoyl Estate Development & Services, Legal Resources Alliance & Co and Natspace Telecommunication Investment Limited with a combined equity of 80 per cent of the consortium are linked to businessman, Dr. Olatunde Ayeni.
Apart from being the Chairman of Skye Bank Plc, Ayeni is also a director of the Ibadan Electricity Distribution Company, one of the electricity distribution companies that were recently sold by the BPE.
Speaking at the bid opening ceremony, the Minister of Communications Technology, Dr. Omobola Johnson, said the Federal Government would continue to fine-tune policies to provide enabling environment for the growth and development of a private sector-driven telecommunications industry.
She said, “The privatisation of government-owned telecoms companies, NITEL and M-Tel, is the last segment in the well-thought-out reform of the Nigerian telecommunications sector which commenced in 2000.
“The liberalisation of the sector in the last 13 years has attracted new investments of over $32bn entirely from the private sector, resulting in an explosive impact on the sector with over 130 million subscribers compared to just 750,000.
“It is our fervent hope that today’s event will lead to the final emergence of a qualified bidder with the requisite technical expertise and financial resources to transform the two companies in line with the vision of government.”
The Executive Commissioner, Nigerian Communications Commission, Mr. Okechukwu Itanyi, said with the privatisation, the hope of Nigerians for diversified telecommunications industry had been rekindled.
He said NITEL had the resources and pedigree to bring back landlines and champion broadband revolution in the country.
Past attempts to sell the First National Operator in the last 13 years had reportedly been marred by insincerity and manipulation of the process by government officials and private sector operators.
