FGN seeks bids for NITEL’s assets

The federal government is seeking buyers for the assets of distressed Nigerian Telecommunications Plc (NITEL), the state-appointed liquidator said on Monday.

The liquidator, appointed by National Council of Privatisation (NPC) , said in an advert it wanted bidders with five years of telecom experience and a net worth of at least $200 million.

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 has 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 may be less than the value of the debt.

Nigeria, which has  one of the world’s fastest-growing telecoms markets, opted to wind up NITEL in March, 2013 after almost a decade of struggling to sell it, due to the shambolic state of its fixed lines and high levels of debt.

Nitel owes creditors – mostly suppliers – around N400 billion ($2.5 billion), 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 $2.5 billion for NITEL but could not raise the cash for the deal.

A separate consortium made a $959 million 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 1 million.

The Nigerian Population has over 100 million mobile subscribers.

Ajibola Aderonke is an auditor at professional services firm Ernst & Young (EY). She previously worked another Big 4 accounting firm PwC. She can be reached at ajibolaaderonke@gmail.com for ideas and suggestions. The post above and its ensuing comments, if any, is purely the opinion of the writer.