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FG seeks new buyers for NITEL

By on June 11, 2014

The Federal Government is seeking buyers for the assets of distressed former telecoms monopoly, the Nigerian Telecommunications Limited, the state-appointed liquidator said on Monday.

The government opted to wind up NITEL in March after almost a decade of struggling to sell it due to the shambolic state of its fixed lines and high levels of debt, despite the country having one of the world’s fastest-growing telecoms markets, according to a report by Reuters.

The liquidator, appointed by the National Council of Privatisation, said in an advert that it wanted bidders with five years of telecoms experience and a net worth of at least $200m.

It said bids must be submitted by 1600 GMT on June 30, adding that the assets would be handed over to the preferred bidder in December.

The privatisation body said it opted for a sale method it called “guided liquidation” because it wanted to protect the government from future claims and liabilities, as proceeds of the sale might be less than the value of the debt.

NITEL owes creditors – mostly suppliers – around N400bn, with creditors taking a loss if the proceeds from the sale are not enough to repay all the debt.

In 2010 a consortium including Dubai’s Minerva and China’s second-biggest carrier, China Unicom, bid $2.5bn for the company but could not raise the cash for the deal.

A separate consortium made a $959m bid the same year but this failed when the bidder missed several deadlines.

NITEL’s fixed-line subscribers have fallen to fewer than 100,000 from five times that number in 2001 and subscribers to its MTEL mobile unit have dropped to a few thousand from over one million.

 

 

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