Sale of Nitel/Mtel assets gears up as BPE receives 17 interests
Despite its moribund state, Nigeria Telecommunication Ltd (NITEL) and its mobile arm, Mtel, are still attractive to investors as 17 bidders are now prospecting for their core assets in the ongoing guided liquidation exercise of the national telecom carrier.
The assets on bid for NITEL are the licences and the spectrum, the nationwide fixed wired networks, the national right of way duct system, the fibre optic transmission backbone, and the CDMA network system. Others are international gateway earth stations, microwave transmission equipment/network and towers and other core assets.
For Mtel, the assets on sale are the licences and the spectrum, national right of way, the Mtel GSM network including mobile switching centres, base station controllers, base transceiver stations and the general packet radio services. Others are the analog (TACs) system and other core assets.
Also on offer is the SAT-3 international submarine cable in which NITEL has 6.32 percent shareholding in the consortium.
The bidders emerged after the June 30 deadline for expression of interest in an exercise being handled by Olutola Senbore & Co, the liquidator appointed by the Federal Government to dispose of the companies that have defied three attempts at their privatisation.
Benjamin Dikki, director-general, Bureau of Public Enterprises (BPE), said the number of prospectors was a reflection of the feedback from the recent road show in the United Kingdom and the attraction of the moribund firms.
“When the time for the submission of Expression of Interests (EoIs) closed, we got 17 EoIs. Five were late and were not accommodated in strict compliance to our rules,” Dikki said.
He said the 17 bidders were currently being evaluated and would go through the approval process, and that BPE would announce those that emerged on completion of evaluation, adding, “They would be given a chance to do due diligence, and then at the appropriate time be asked to submit technical and financial bids.”
NITEL, formerly a part of Post and Telecommunications (P&T), is a fully-owned state enterprise established in 1958. It was severed from P&T and was incorporated as a limited liability company in December 1984. It is currently owned 93.3 percent by the Federal Government and 6.7 percent by First Bank.
Since inception, the telecom firm was only able to provide 450 subscriber lines for a population of 120 million until the arrival of the Global Satellite Mobile (GSM) communication system in 2001.
With the coming of the new GSM providers that have delivered where NITEL faltered, the company went further into doldrums. Its inability to compete in the liberalised telecom sector forced government to offer its assets for sale in a guided liquidation after failed attempts at privatising it.
Dikki said the guided liquidation was not auctioning of the various parts of the company.
“We are selling the company as a business unit that must continue doing business in the telecoms sector, because NITEL is the first national carrier. We have done similar things before with the AFCON, the fertiliser company which is today known as Notore,” he said.
AFCON and Jebba paper mill were sold under the guided liquidation option and the companies are today the reference point for efficiency and good management.
“Through guided liquidation, the company should run in the same line of business as it has been set up to do,” said Dikki.
Earlier in the year, Dikki had noted that NITEL/Mtel guided liquidation was a flagship transaction this year and the process started with the court approval of the option and the appointment of Olutola Senbore as the liquidator.
The telecom firms which have defied several efforts to dispose of them currently have N350 billion liabilities and a committee of inspectors comprising the supposed creditors had been formed to audit the assets in the course of their liquidation.
The BPE had earlier met and resolved with the Nigerian Communication Commission (NCC) on the status of the licences and spectra owned by NITEL/Mtel.
“We were made to understand that the outstanding on the payments on these and the proceeds from the sale of these will be handed over to the NCC after liquidation,” Dikki said.
On the N350 billion liabilities of NITEL, he said the Federal Government in line with the Companies and Allied Matters Act (CAMA) had sought for protection so that the balance from liabilities would not go back to the treasury, noting that “the liabilities are huge and this is why guided liquidation option was adopted”.
BADEJO ADEMUYIWA
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