Nigeria has approved a controversial $2.5bn offer for the country’s main fixed-line telecoms group, but has demanded that the winning consortium come up with a $750m downpayment to secure the sale.
The approval follows years of ill-fated efforts to sell off Nitel, which has withered since liberalisation a decade ago enabled MTN and Zain to make Africa’s most populous nation one of the world’s fastest-growing telecoms markets.
The winning bid at February’s privatisation auction caused consternation when it valued a 75 per cent stake in Nitel at five times the $500m that industry experts estimated to be the group’s top-end valuation.
On Tuesday a spokesman for the Bureau of Public Enterprises said that President Goodluck Jonathan had given long-delayed approval to the transaction.
The consortium will have 10 days to pay 30 per cent of its offer, or $750m, from the date it receives an official demand for payment, followed by a further 50 days for the balance.
One Nigerian financier who has followed the Nitel saga said: “What they are doing is saying: ‘If you have the money, bring it.’ ”
The New Generation Telecommunications consortium of local and foreign investors offered $1.5bn more than the second-placed bidder.
China Unicom, China’s second-biggest telecoms operator, after initially denying New Generation’s claim that it was the consortium’s technical partner, acknowledged that its London-based subsidiary had been in touch with bidders about potentially taking a 20 per cent stake in Nitel.
The consortium has maintained that its “financial backbone” is a Dubai investment house called Minerva Group.
In confidential profiles sent to potential customers and seen by the Financial Times, Minerva describes itself as “not only the biggest but also one of the most reliable financing partnership and fund management services providers to the global market from the Middle East”.
Minerva has repeatedly declined to respond to questions and its West African representative could not be reached on Tuesday.
A spokesman for New Generation said that the consortium would respond to the approval once it had received official notification.
Oct132010