The on-going attempt to sell the national telecom carrier, Nigerian Telecommunication Limited (Nitel) and its mobile arm, Mtel, is again mired in controversy which may see the withdrawal of some prospective investors who described the process as non-transparent.
The disquiet among the bidders is occasioned by the unbundling of Nitel, the caveat emptor status of the enterprises which compelled bidders to package their bids with limited information on Nitel’s status, and the entrance of a new bidder, Fugatech Limited when the process is almost drawing to a close.
“How do you describe the entrance of a new bidder to a transaction that has almost drawn to a close…I would not be surprised if this is one of the reasons why Etisalat pulled out because its representatives did not attend the pre-bid conference last week”, lamented a bidder after the pre-bid conference held last week in Abuja.
Christopher Anyanwu, director general, Bureau of Public Enterprises (BPE), had insisted that the transaction is credible and transparent even as he defended the entrance of Fugatech Limited.
“The transaction is still open till January 22 when the technical and financial bids will be submitted and this is clearly stated in the advertisement. I will not be surprised if two or more bidders join before that date”, he said. He explained that bidders were asked to bid on assumption due to the resistance by the workers to bidders inspecting Nitel’s facilities. “It was the workers that refused them access to inspect Nitel’s facilities, but as regards the financials, government asked them not to bother because Transcorp did not keep a good record while there and there is no audited account of the enterprises,” Anyanwu said.
BPE and the industry regulator, Nigerian Communication Commission (NCC), have also come under criticisms for perceived interest in some bidders, an act that could lessen competition in the sector.
Reuben Muoka, NCC’s spokesperson said there is no section of the telecom act that bars Globacom, for example, from buying Nitel because they have different frequency allocations. “Globacom cannot buy Mtel because every GSM operator has equal frequency allocated to it and allowing Globacom to buy Mtel will double its frequency allocation and place it above other GSM operators in the market,” he said.
The bidders last week pushed for the extension of bid submission by 30 days which was declined by the BPE. The only option, according to the bidders, is to package their technical and financial bids on the assumption of the knowledge of what a telecom firm must have using MTN and Globacom and others in the industry as benchmark.
“Some of us are now at a loss on how to convince a financier or an equity partner to bring in funds for the deal in a country with high political risks and with no leader,” lamented another bidder who said the declaration of caveat emptor which has disallowed the conduct of due diligence on Nitel by the BPE is a stumbling block.
This, bidders told BusinessDay, will likely affect participation because they have no information about what they are buying.