Nigeria Content Online

Brymedia
West Africa Limited, one of the companies that emerged frontrunners in
the bid for the national telecoms carrier, Nigerian Telecommunications
Limited (NITEL) and its mobile subsidiary, MTel, is said to have
commenced strong moves to realise its ambition.

During
the financial bid exercise held February 16 last year, Brymedia, which
has a technical partnership pact with Telecom New Zealand, emerged
second runner-up with an offer of about $551million, excluding the Code
Division Multiple Access (CDMA) network system, after Omen
International Limited (BVI), which emerged the reserve bidder with a
$956.996million.

However,
following indications that New Generation Consortium, which was
announced the preferred bidder by the National Council on Privatization
(NCP) could not pay the $750million (about N112.5billion) initial bid
security at the expiration of the extended deadline of December 23,
2010, the management of Brymedia, NEXT gathered at the weekend, is said
to have indicated interest to move in and take over the company.

A
senior Bureau for Public Enterprises (BPE) official had told NEXT in
confidence during the week that another extension is not likely to be
granted the preferred bidder, as it was clear it was either not serious
about paying the $2.5billion offer it made or it does not have the
capacity to do so.

The
official, who said the management of the privatisation agency is
already looking beyond the New Generation offer, indicated that the
option open for consideration when they resume from holidays today
(Monday) is to formally inform the NCP chairman and vice president,
Namadi Sambo, on the latest development and solicit his approval to
cancel the bid.

Though
the official did not say what step the BPE would take next, it was
gathered that options may include adopting the proposal by the
Adetokunbo Kayode-led 8-member ad-hoc committee constituted March last
year to review the sale in the wake of the initial confusion that
trailed the bid, by either inviting the reserve bidder to come forward
and take up the bid, or for the bid process to start afresh.

But
authoritative sources close to the BPE, who pleaded anonymity, confided
in NEXT that Brymedia has already written to the authorities of the
privatization bureau indicating his interest to raise its former offer
to about $600 million, which it considers the current realistic value
for NITEL.

The
issue of appropriate valuation of NITEL had been one of the issues that
generated a lot of interest and debate among investors during the bid
exercise, as most analysts described the $2.5 billion offer then by New
Generation Consortium as overambitious and unrealistic.

When
the offer by New Generation was first announced, Lanre Opayemi, an
Abuja-based finance analyst, had dismissed it as unrealisable, saying:
“If the U.K.-based IILL could not mobilise $1.3billion to pay for 51
per cent stake in NITEL in 2001, what magic would an almost anonymous
company like New Generation Telecommunications Limited perform to be
able to raise a whooping N350 billion to pay for 75 per cent equity in
the company at a time the state of the nation’s economy is having one
of the worst security guarantee ratings to prospective investors?”

Though
Brymedia management wants to keep its interest under wraps till they
receive a response from the federal government, it was gathered that it
was committed to mobilise its technical expertise of its international
partners to facilitate the turnaround of the moribund national telecoms
company.

The
first attempt at privatising NITEL and its mobile subsidiary, MTEL, was
in 2001, when Investors International London Limited (IILL) emerged the
preferred bidder with an offer of $1.317 billion for 51 per cent equity
stake in the company. IILL’s failure to meet its commitment with the
payment for the bid offer at the expiration of the agreed deadline
resulted in the termination of the bid.

Another
attempt in 2003 to bring on the first strategic investor sale through a
management contract ended in a flop, as Pentascope failed to meet its
contractual obligations.

A
third attempt with Orascom, the Egyptian telecom firm, which emerged
the front bidder with a $256.53 million offer, did not go the distance,
as the bid was duly turned down, because it fell below the reserve
price for 51 per cent stake in the company.

Following
the valuation of 100 per cent of NITEL’s equity at over $1 billion in
2005, government thought the $750 million offer the following year by a
consortium of Nigerian investors under the aegis of Trasnnational
Corporation of Nigeria (Transcorp) PLC for 75 per cent equity
stake-holding was attractive enough to end the nightmare of endless
search for a reliable core investor in the national carrier.

Less
than three years of Transcorp’s management, NITEL’s fortunes plummeted,
with connected lines dropping from over 400,000 to less than 100,000,
while working lines declined from over 296,000 to about 5,000.

Last
year’s bid exercise, which threw up New Generation Consortium as bid
winner, was expected to be the last. But, with the company’s failure to
pay for its offer at the expiration of the deadline last December, the
journey for NITEL appears endless, as the search for a new owner is
about to commence again soon.