BusinessDay... the voice of business: Government begins search for investor for 51% equity in NITEL/MTEL

Government begins search for investor for 51% equity in NITEL/MTEL
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BADEJO ADEMUYIWA, Abuja on 24 March, 2008 12:00:00
 
This follows the conclusion of arrangement by Bureau of Public Enterprises (BPE)
to seek expressions of interest (EoI) for the appointment of privatisation
advisers for the two companies.
Chigbo Anichebe, head, public communication, BPE, said the bureau’s action
followed the directive of the National Council on Privatisation (NCP) to begin
the process to engage a new core investor with the requisite technical,
managerial and financial resources to take over the management of NITEL/MTEL
from Transnational Corporation of Nigeria (Transcorp), its current managers.
Anichebe said the BPE in line with government’s objectives was “seeking the
services of an advisory consortium that would include financial, legal,
marketing, accounting, technical and valuation advisers to advise it on the
privatisation process.”
The consortium would be expected, among others, to review the operations of
NITEL and MTEL and prepare an information memorandum.
It would also prepare valuation reports that would give an indicative base
price for the enterprises as well as prepare draft contract documents and all
other transaction documents required for competitive and transparent bidding
process.
The consortium would also be expected to market NITEL/MTEL to prospective
investors and assemble all documents that would be required in hosting data
room.
Another key task of the adviser would be to evaluate the technical proposals
submitted by prospective core investors and advise the NCP accordingly and
prepare a comprehensive post-transaction report for the NCP.
The BPE on behalf of the Federal Government in 2006 sold 51 percent equity to
Transcorp and retained 49 percent.
Both the Federal Government and Transcorp have mutually consented to
restructuring the current shareholding and admitting a core investor who will be
offered a 51 percent stake in NITEL/MTEL.
Consequently, the 51 percent will be contributed by both the Federal Government
(22 percent) and Transcorp (29 percent), which in effect implies the dilution of
Transcorp’s stake, bringing it down to 22 percent while government retains 27
percent.
NITEL was incorporated as a limited liability company in December 1984, a
product of the merger between the telecommunications arm of the defunct Post and
Telecommunications Department (P & T) of the Ministry of Communications and the
Nigerian External Telecommunications Limited (NET.) NITEL formally started
operations in 1985.
In 1996, the Federal Government established the Nigerian Mobile
Telecommunications Limited (MTEL) to provide cellular services and thus
transferred NITEl’s cellular operations that it started providing in 1992 to
MTEL.
Following the auction of Digital Mobile Licences by the Nigerian Communications
Commission (NCC) in February 2001, NITEL acquired a GSM licence, which it
transferred to MTEL, its wholly-owned subsidiary, in March 2003.