sale of nitel

NITEL creditors to share N45bn sales proceeds

Head, Public Communications, Bureau of Public Enterprises, Mr. Chigbo Anichebe| credits: thecitizenng.com

Creditors owed about N300bn by the Nigerian Telecommunications Limited will have to share the $252m (about N45.36bn) that was offered by the prospective investor in the company and its mobile subsidiary, the Nigerian Mobile Telecommunications Limited, investigation has shown.

The Head of Public Communications, Bureau of Public Enterprises, Mr. Chigbo Anichebe, confirmed this in a telephone interview with our correspondent on Monday.

He said it was because the proceeds from the sale of NITEL and M-Tel would not be enough to settle the creditors of the companies that the National Council on Privatisation approved guided liquidation as the best system for the latest effort at privatising the firms.

To make the coast clear for the sale of the company, the Federal Government had since settled the workers through a negotiated five-year pension buyout plan.

Anichebe said, “It was certain that the proceeds from the sale of NITEL were not going to be enough to settle the creditors; that was why we opted for guided liquidation.

“When a company is liquidated, the proceeds are used to settle the creditors. Whatever they get is their final settlement and they have been carried along in the process.”

The creditors of the beleaguered telecommunication firms form a significant percentage of the Committee of Inspection appointed by the court to work with the liquidator. They have been representing the interest of the creditors in the transaction process. The Debt Management Office is also represented in the committee.

Our correspondent learnt that the committee was also verifying the claims of indebtedness submitted by the various entities that had done business with NITEL and M-Tel to establish the authenticity of the transactions leading to the accumulation of the debts.

Following the disqualification of NETTAG Consortium, one of the two companies that bid for NITEL, as a result of its failure to provide a bid bond, only the financial bid of NATCOM Consortium qualified for opening on December 3.

Accordingly, the financial proposal of NATCOM was publicly opened and the consortium won with a bid price of $252.25m.

After the recent ratification of the transaction by the NCP, the BPE signed an Asset Sale Agreement with the preferred bidder in Abuja last week.

However, another entity, Arabian Amlak for Investment Limited led by Gen. Abdullahi Mamman has gone to court to challenge the BPE for selecting NATCOM Consortium as the preferred bidder for NITEL and M-Tel.

The company said it was preposterous for the BPE to offer NITEL and M-Tel to NATCOM Consortium for $252m when it had made an offer of $919,999,999 to the privatisation agency through a proposition of ‘willing-buyer willing-seller’.

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Why sale of NITEL, MTEL was delayed —BPE

The Director-General of Bureau of Public Enterprise (BPE), Dr Benjamin Dikki, has said that one of the factors that delayed the privatisation of NITEL and MTEL was as a result of inability of the initial highest bidders to pay for the two companies they bidded for.
He said that the initial highest bidders were unable to make some necessary investments after acquiring the companies and as a result, revoked the sale.
During an interview with the Nigerian Tribune, Dr Dikki said, “the NITEL transaction has gone through about four phases of privatisation The first phase was to Investment International Limited, which failed to pay and another second round of transaction was held which produced ORASCOM as the highest bidder; they bidded $256 million then and the government considered the bid too low, so it rejected the offer.
“Then we had the negotiated sale to Transcorp Interntional. They took over NITEL for some months and was not able to make the necessary investment, so the government took back NITEL.
“Then we went through another sale process where New Generation Company emerged as the preferred bidder with $2.5 billion bid but they also could not pay. We made reversion to the reserved bidder who also failed to pay.”
The BPE boss, however, said, “it was after that we started this guided liquidation, and the guided liquidation was basically adopted because the liabilities NITEL has accumulated, which is in a excess of N300 billion, was far in excess of what the sales of NITEL realized. So the government took advantage of the legal provisions of the Companies and Allied Matters Act, which makes provision for liquidation to liquidate NITEL and MTEL so that government liabilities are restricted to how much money can be realised from the sale.”
It was after the liquidation that NATCOM emerged the highest bidder with $252 million to acquire NITEL and MTEL. The government had initially rejected NATCOM initial bid of $221 million, later NATCOM increased the bid to $252 which was accepted by the government.

FG approves sale of NITEL/MTEL for $252m

The National Council on Privatisation (NCP) on Thursday approved the sale of the liquidated Nigeria Telecommunication Plc and its subsidiary, Mtel, to NATCOM Consortium for $252 million.

Atedo Peterside, the chairman of NCP’s Technical Committee, told State House correspondents in Abuja that the approval was one of the decisions taken at a meeting of the council presided over by Vice President Namadi Sambo.

He said that NATCOM beat one other bidder to clinch the deal.

“What happened today was that the NCP approved the transaction which is like the final phase of the approval because only the NCP has the powers to pronounce a winner.

“So, the NCP today confirmed the process and so, the transaction from the point of view of approval and emergence of preferred bidder is now confirmed.“We now have a preferred bidder that has been fully ratified by the NCP.

“So, that brings us to the end of the bidding process. So, that is the highlight of the decision on NITEL/Mtel,” he said.

According to him, the ratification of the sale by the NCP marks the end of the entire bidding process and what is now left is to conclude the necessary documentation.He noted that the NITEL/Mtel transaction was different from what happened with sale of power plants because NITEL was not ongoing concern, but a liquidated one and no longer in business.

“In view of this, the liquidator will through the court pay some verified claims of creditors of NITEL/Mtel, which, therefore, sidesteps the issue of third party creditors.”“But it does not preclude the government from settling any obligations it feels like,” he further explained.

Benjamin Dikki, the director-general, Bureau of Public Enterprises (BPE), who also addressed the correspondents on the outcome of the meeting, announced that Indorama Eleme Petrochemical Limited had passed the performance evaluation administered on it.

”It means that Indorama has fulfilled the sale purchase agreements it signed with BPE and is therefore freed from a five-year probation/monitoring period.“The necessary documentation will now be done so that Vice President Namadi Sambo can hand over the certificate of release to the company,” he said

(NAN)

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