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'OUR NITEL BID IS STILL VALID'

By NBF News

'Our NITEL bid is still valid'
By Ejiro Gegere
March 17, 2010 12:27AM
New Generation's takeover of NITEL depends on what the committee finds. Photo: NEXT

Despite the setting up of an external committee by the federal government to look into the bid process for Nigerian Telecommunications Ltd (NITEL), bid winners are optimistic that their bid will remain valid at the end of the committee's investigation.

Usman Gumi, the Managing Director of Gicell Wireless Ltd, the only Nigerian member of New Generation Telecommunication Ltd, the consortium which won the bid NITEL, argued that the setting up of the committee does not invalidate the $2.5billion winning bid.

'The government only wants to do an external due diligence process on the NITEL bid and that does not mean that the bid had been cancelled,' Mr. Gumi said.

'The government is doing this to ascertain that the bidders have the financial ability and capacity to run NITEL.'

Routine process
Adrian Wood, the chief executive officer of Brymedia Consortium, one of the participants in the bid, supported Mr. Gumi's claim. He said, 'I have had such experience before in other countries, which is quite common where either the supervising ministry or government would want to have a look at a bidding process again. So, the government is not doing anything unusual, it just a normal process.'

However, this is the first time the government is setting up an audit committee to review a NITEL bid, which has been sold three times in the past under different privatisation exercises conducted by the Bureau of Public Enterprises (BPE).

Reiterating the legality of the current exercise, Mr. Gumi said, 'This is a process that went through BPE did all their due diligences, approved it and sent to their technical partner (PNB Paribas) and did their own due diligence before recommending to the technical committee of the National Council of Privatisation (NCP). They also did their own due diligence process before recommend the transaction to the council.

'The process was aired live; it was an open and transparent process where it was cover on the National Television.

'All prospective investors were given the same opportunity and we bided and came first in the technical submission and also first on the financial bid. We not only came first we out bid other investors by $1.5billion to show our commitment and seriousness.

'We are not just bidding for the sake of bidding; we are bidding for the value of NITEL, as we did not want to short-change the government,' Mr. Gumi insisted.

Misinformation
Controversy has trailed the recent NITEL bids, as it did the previous ones, and this round was sparked off by issues of technical and financial competence, following the denial by China Unicom Hong Kong of being the technical partner to New Generation.

Mr. Gumi blamed the media for the escalation of the misinformation, saying, 'We were waiting for the council to meet and give its final approval then the misinformation regarding whether China Unicom Hong Kong was involved with us or not came up.

'When China Unicom Hong Kong was approached, they said they did not participate in the bid but the media reported that China Unicom denied any knowledge of the bid which is a different story. The China Unicom implied that they did not come for the bid not that they do not know about the bid.'

'China Unicom Hong Kong and Europe were in contact with the bidders, as they offered to be the technical and managerial partners and possibly taking over 20 per cent equity of the bid if we win, but no media reported that.'

He, however, agreed with a statement from China Unicom Hong Kong last month saying that the company has not commenced any negotiation with any bidder for NITEL with respect to any substantive and legally binding agreements.

But Mr. Gumi reasoned that this was the firm's way of ensuring that New Generation concluded all the details with the bid before any agreements were reached.

'Yes, we have to win the bid before we finalised negotiation with China Unicom as our technical partners because we cannot negotiate on a hear-say case. That was what they are meant to do which is also why we want them to be the technical and managerial partner.'

Financial implication
Despite the odds against the bids, participants believe another cancellation will have grave financial implications for the national carrier.

Mr. Wood said, 'We hope the process would continue because so much work has been put into this. I think you probably know that the bidders have spent a lot of money in this bidding process.

'We have been working on the NITEL project since June 2008. All of the bidders have made huge commitment, so if the process is cancelled that would be very expensive.'

'I don't expect that the process would be cancelled. What we are hoping for is that the committee would publish the scores of the technical evaluation and how the technical bids were subjected to and scored.'

Mr. Gumi was, however, optimistic of his company's takeover of NITEL.

'We are sure that we are still going to win the bid of NITEL because we know what we did and we are very positive with the all transaction,' he said confidently.

With regard to NITEL's worth and outstanding liabilities, the bid winner argued, 'Yes, our bid was worth NITEL. As at today, NITEL liabilities are worth over $1.8billion, so if we have not bided that amount the government would have to search for money to pay those liabilities.

'Our first bid was $333,000 which including the liabilities meaning that we were to offset the liabilities ourselves and that was why we bided low and our second bid $2.5 billion was without the liabilities. So, what we are offering – $2.5billion is enough for the government to use $1.8billion to take care of all outstanding liabilities – staff salaries, on-going projects etc.'

All efforts to get the Bureau's response on the issue proved abortive as the spokesperson, Chigbo Anichebe did not respond to calls and text messages.


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