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NATCOM Pays Outstanding $177m to Clear its NITEL, MTel Acquisition

Milcah Lukhanyu by Milcah Lukhanyu
6 years ago
in Business, Tech, Telcos
6 min read
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7533NATCOM Consortium has paid the outstanding $176,575,700 as the 70 per cent remainder of the $252,521,000 bid price for NITEL and MTEL’s acquisition after an earlier $75,756,300 deposit, a 30% down payment the firm made in January.

NATCOM had until Tuesday, April 7, 2015 to clear the balance after the acquisition was approved by the National Council on Privatisation (NCP) on February 27, 2012.

The January payments were in line with the offer letter issued by the Bureau of Public Enterprises (BPE) which required NATCOM to make an initial deposit of 30 percent of the bid price not later than 14 days on receipt of the offer letter and then pay the balance of 70 percent of the bid price within 90 days.The strategy was adopted by the NCP after due consideration of other options and in the light of the previous failed attempts to privatise NITEL and MTEL through Strategic Core Investor Sale and Negotiated Sale strategies and the huge liabilities of creditors to the tune of over N300 billion.

Under the guided liquidation strategy, all the core assets and business undertaking of NITEL and MTEL were to be sold as a single or multiple lots to a qualified bidder by the Liquidator under the general guidance of the National Council on Privatisation.

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Thus, the bidder that acquires the assets of NITEL and MTEL will pledge to continue to operate the assets to provide telecoms services. This is as against the traditional liquidation of an enterprise by asset stripping.

Consequently, advertisements for submission of Expressions of Interest (EOIs) from prospective bidders for the acquisition of the assets and business undertaking of NITEL and MTEL were placed in both local and international print media by the Liquidator. At the closing date on June 30, 2014, 17 organizations/consortium submitted EOIs; and only two satisfactorily met the stipulated criteria for pre-qualification.

On September 18, 2014, the  two successful applicants, NATCOM Consortium and NETTAG Consortium, that met the minimum pass mark of 75% were pre-qualified and issued the Request for Proposals (RFP) and allowed to proceed to data room and physical due diligence stage prior to preparation and submission of their technical and financial proposals.

The deadline for submission of technical and financial bids was Friday, November 7, 2014. The two pre-qualified bidders, NATCOM Consortium and NETTAG Consortium, submitted their technical and financial bids before the expiry of the deadline. The technical bids received from the two bidders were evaluated.

Unfortunately, one of the two pre-qualified bidders, NETTAG Consortium, was disqualified for failure to enclose a bid bond as clearly stipulated in the RFP.

Following the disqualification of NETTAG Consortium, only the financial bid of NATCOM Consortium qualified for opening on December 3, 2014; having scored an average of 92% in its technical proposal which was above the minimum pass mark of 75%, and satisfied the requirement of a valid bid bond.

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Accordingly, the financial proposal of NATCOM Consortium was publicly opened on Wednesday, December 3, 2014 which it won with a bid price of $252.25m.

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Tags: AcquisitionMTELNATCOMNigeriaNITELTelcos
Milcah Lukhanyu

Milcah Lukhanyu

Milcah Lukhanyu covers daily news briefs at TechMoran. She is the person who will probably read your press release and get the story out of it or totally trash it. Send tips to [email protected]

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