Nitel bidders miss $750million deposit deadline

0
239

A group of private companies missed a deadline Thursday to provide a $750 million down payment to purchase Nigeria’s ailing state-run telephone company, the latest setback in efforts to privatize the firm.

The New Generation Telecommunications Consortium requested another 30 days to put up the deposit on its $2.5 billion bid for Nigerian Telecommunications Ltd., known locally as Nitel, said Usman Gumi, managing director of local company and consortium member GiCell.

A spokesman for Nigeria’s Bureau of Public Enterprises, the presidential task force set up to privatize state industries, could not be reached for comment Thursday night.

The proposed sale to the consortium, which Nigerian federal officials say includes China’s Unicom Ltd., Dubai’s Minerva and local company GiCell, has faced scrutiny. The $2.5 billion bid by the consortium appears grossly overpriced compared to the next highest bid of about $956 million by Omen International.

Federal authorities examined the deal for about eight months before allowing it to move forward. However, it put stringent terms on the deal, requiring the down payment in 10 days and the remaining $1.75 billion within 60 days after that.

Usman said the group still could come up with the money to buy Nitel.

“No investors will tie down his money for eight good months,” Usman said. “If you give us 10 calendar days to pull that money back together, you’ve not been fair to us.”

Nitel, in principle, provides landline telephone service in Nigeria, Africa’s most populous nation with 150 million residents. However, the state company’s telephones now rarely work, pushing most consumers into the oil-rich nation’s rapidly expanding mobile phone market, where private companies hold the edge.

Nigeria has an estimated 1.3 million landline telephones, compared to 62.9 million mobile phones.

Privatizing Nitel could prove profitable, as the company does have lines strewn throughout Nigeria’s cities.

Source: ABC