Nigeria Content Online

The Bureau for
Public Enterprises (BPE) is in a fix on the next line of action in
selling the Nigerian Telecommunications Limited (NITEL), and its mobile
subsidiary, Mtel, following the recent failure of the preferred bidder
to meet its payment deadline.

New Generation
Consortium, the bid winner announced last February, was, more than
twice, given an extension by the National Council on Privatisation
(NCP) till December 23, 2010 to pay the initial bid security of $750
million (about N112.5 billion) for the offer.

But, surprisingly,
at the expiration of the deadline, Usman Gumi, New Generation chief
operating officer, said that the consortium was only able to send a
letter from its financiers to the BPE as proof of its financial
capacity to make the initial payment, and also the entire bid sum of
$2.5 billion, an arrangement that contravened the bid guidelines.

The guidelines
stipulate that the preferred bidder should make the payment by
electronic transfer or dollar-denominated bank draft to the account
designated by the BPE on or before the expiration of the deadline.

It was learnt
yesterday in Abuja that the privatisation agency has since commenced
consultations on the next line of action to bring to conclusion the
long transaction, which has already failed a record four times since
2001.

“What I have to
tell you is that it has become clear now that that the company (New
Generation Consortium) is either not serious, or that they do not have
the money to pay for NITEL,” a senior BPE official said in an interview.

“After the Federal
Government bent over backwards to extend the payment deadline more than
twice, there is nowhere a serious bidder would not reciprocate by
paying and closing the transaction. When we (BPE) resume from holidays
on Monday next week, the first thing management will do is to seek the
approval of the Presidency, through the NCP chairman, to consider other
options of bringing the bid process to a close,” he concluded.

Sale options

Two options,
proposed in March last year by the Adetokunbo Kayode-led ad-hoc
committee to review the sale, have always been open for consideration
following the initial confusion that trailed the bid, which culminated
in the sack of the then director general of the BPE, Christopher
Anyanwu.

These included a
recommendation for NCP to order the BPE to invite the reserve bidder to
come forward and take up the bid, or for the privatisation agency to
cancel the entire process and start afresh by calling for new
expression of interests (EoIs) from new investors.

Indications are
that the BPE might be willing to adopt the second option of annulling
the entire bid for a fresh start, as most of the groups that
participated in the February 2010 bid considered the New Generation
Consortium’s offer of $2.5 billion too over ambitious, and may not be
willing to have anything to do with it.

Calls to BPE
director general, Bolande Onagoruwa, for a confirmation did not go
through as her special assistant, Azeez Aderemi, confirmed she was yet
to return to the country from her foreign trip.