NATCOM makes full payment for acquisition of NITEL, MTEL

NATCOM Consortium has paid the 70 per cent outstanding balance of the $252,521,000 bid price for the acquisition of the assets and business units of the Nigerian Telecommunications Limited (NITEL) and its mobile arm, Nigerian Mobile Telecommunication (MTEL).

The payment, $176,575,700 (N29,696,469,600), was made after an initial payment of $75,756,300 (N12, 727,058,400), being 30 percent of the bid price on January 6, 2015, in line with the offer letter by the Bureau of Public Enterprises (BPE), which mandated NATCOM to make an initial deposit of 30 per cent of the bid price not later than 14 days from the date of the offer letter.

Chigbo Anichebe, head, public communications of BPE confirmed the payment, saying NATCOM effected the remission of the 70 per cent balance on Thursday, April 2, four days ahead of the April 7 deadline.

At its meeting of February 27, 2012, the National Council on Privatisation (NCP)  approved the privatisation of NITEL and MTEL through guided liquidation.

The strategy was adopted by the council after due consideration of other options and in the light of the previous failed attempts to privatise the firms through the strategic core investor sale and negotiated sale strategies, and the huge liabilities to creditors to the tune of over N300bn.

Under the guided liquidation strategy, all the core assets and business undertakings of NITEL and MTEL were to be sold a qualified bidder by the liquidator under the general guidance of the NCP.

Thus, the bidder that acquired the assets of NITEL and MTEL was to continue operating the assets to provide telecoms services. This is against the traditional liquidation of an enterprise by assets stripping.

At the closing date of expressions on June 30, 2014, only two organisations out of the 17 organisations/consortia that submitted Expressions of Interest (EOIs) met the stipulated criteria for pre-qualification as advertised by the liquidator in both local and international print media.

On September 18, 2014, the two successful applicants, NATCOM Consortium and NETTAG Consortium, were pre-qualified and issued the Request for Proposals (RFP) and allowed to submit their technical and financial proposals.

However, NETTAG Consortium was disqualified for failure to enclose a bid bond as clearly stipulated in the RFP. As such, only the financial bid of NATCOM Consortium qualified for opening on December 3, 2014 with an average score of 92 percent in its technical proposal.

Accordingly, the financial proposal of NATCOM Consortium was publicly opened on Wednesday, December 3, 2014, which it won with a bid price of $252.25m.

Consequently, on Monday, December 22, 2014 in Abuja, the consortium signed the assets sale agreement and obtained the offer letter from the liquidator of NITEL/MTEL and the BPE.

The companies would be handed over to the NATCOM Consortium after the approval by the NCP.