Nigeria Cancels Sale of Nitel - Calls in Reserve Bidder
Published on: 15th Mar 2011
Note -- this news article is more than a year old.
Nigeria's Bureau of Public Enterprises (BPE) has announced that it will reconsider the reserve bid for the state owned telecoms network NITEL after the winning bidder was unable to pay the 30% deposit after the previous attempt to sell the company.
Financial bids for NITEL/M-tel were held last February, and Omen International Consortium emerged the reserved bidder with an offer price of US $956 million. The winning bid came from a UK based company, New Generation Consortium who offered a significantly larger USD2.5 billion for the company, but then missed several deadlines to pay the deposit.
The sale was for 75% 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% stake in 2006 in Nitel for $750 million during an earlier privatization sale, but the government reclaimed the stake in 2009 following several years of neglect.