FG in fresh bid to sell NITEL Assets

The federal government has commenced fresh move towards the eventual liquidation of Nigerian Telecommunications Limited, NITEL and its subsidiary, Mobile Telecommunications Limited, Mtel.

Official sources have confirmed that a liquidator to act as an undertaker for the moribund companies could be appointed by a court within the first two weeks of February.

The source disclosed that the move was out of the federal government’s frustration with a series of attempts to privatise the two firms which enjoyed monopoly until about 13 years ago when the telecommunications industry was opened up for private sector participation.

Massive corruption had made it impossible for NITEL and its subsidiary to compete in the liberalised industry, as its operations were grounded, in spite of the fact that private sector competitors had to depend on some of NITEL’s facilities for their operations.

Every attempt to sell NITEL and its subsidiary to a core investor since 2001 failed, leading to a management contract with Pentascope of Netherlands which also failed to deliver and the contract had to be terminated when it was discovered to be a fraud.

The tortuous journey of NITEL’s privatization began 2001 with the failure of Investors International London Limited (IILL) which offered to buy the majority share of the company at $1.317 billion failed to pay the bid price.

In 2003, Pentascope was contracted by the Bureau of Public Enterprises under the leadership of Mal. Nasir el-Rufai, to manage the then ailing NITEL.  Its mandate was top return the company to profitability as a going concern, but the managers failed to achieve the goal, rather they became a liability and had to be sent packing.

An Egypt-based Orascom came up with a rather ridiculous price of $256.5 m to buy 51 per cent stake of NITEL and the process had to be aborted, aftern unprecedented criticisms from stakeholders who insisted that NITEL was worth much more than the investors were offering.

The federal government, again made another effort to sell the majority stake in the national carrier in 2006.  Transcorp offered $750 m but also failed to achieve to objective of revamping the company.  By February 2008, the government of late Umaru Yar’Adua cancelled the transaction owing to criticisms over the willing-seller-willing-buyer negotiated strategy employed in the deal which some people considered non-transparent.

At the end, the federal government refunded Transcorp’s money and re-possessed the company.

The last botched attempt to sell NITEL was in 2010 when the New Generation Consortium emerged the preferred bidder with an offer price of $2.5 billion.

The Consortium was made up of China Unicom of Hong Kong, Minerva Group of Dubai and Nigeria’s GiCell Wireless Limited.