NITEL stake winner fails to make minimum payment – BPE turns to China Unicom

Nigeria’s Bureau of Public Enterprises (BPE) has announced that it will reconsider the reserve bid for the state-owned telco, NITEL after the winning bidder was unable to pay the 30 per cent deposit after the previous attempt to sell the company.

Financial bids for NITEL/M-tel were held last February, and Omen International Consortium emerged as the reserved bidder with an offer price of US$956 million. The winning bid came from a UK based company, New Generation Consortium, which offered a significantly larger US$2.5 billion for the company, but then missed several deadlines to pay the deposit.

The sale was for 75 per cent of the company, with the government retaining the remaining stake.

The offer from the Omen International Consortium – which is backed by China Unicom – was valid for six months, so the privatisation managers have asked them to resubmit their bid, and if approved, then the sale will go ahead.

Local company, Transcorp bought a 75 per cent stake in NITEL in 2006 for US$750 million during an earlier privatisation sale, but the government reclaimed the stake in 2009 following several years of neglect.