NITEL: BNP Paribas Wins Bid as Advisor

BNP Paripas Consortium yesterday emerged the winner of the bid for the advisory services for the privatisation of Nigeria Telecommunications Plc/Mobile Telecommunications (NITEL/MTEL).

This came as the Bureau of Public Enterprises (BPE) vowed to take up Transnational Corporation Plc (Transcorp) at the board level for not securing board approval before appointing its new chief executive officer for NITEL.

The consortium scored 82.48 per cent in a financial bid opening, which was keenly contested with Lazard/Vetiva Consortium; Renaissance/BGL Consortium; and Rothschild/UBA Consortium. Lazard/Vetiva, which came next to BNP Paripas, garnered 75.6 per cent, Rothschild/UBA Consortium, 74.81 per cent and Renaissance/BGL Consortium, 70 per cent.

The outcome of yesterday’s exercise presided over by Chairman, Technical Committee of the National Council on Privatisation (NCP), Mallam Mohammed Hayattuddeen is, however, subject to the approval of the NCP. Hayattuddeen said the result of the financial bid opening would go to the NCP for approval, after which the technical committee would make a formal announcement of the successful advisor.

When approved, the successful consortium is expected to render advisory services including financial, legal, marketing, accounting, technical and valuation advisers to give advise in the process of the privatisation of NITEL The Bureau of Public Enterprises (BPE), the nation’s privatisation implementation agency, had in March called for Expressions of Interest (EOIs) from prospective consortium in the advisory service over the privatization of NITEL/MTEL. The call, the bureau had noted, signaled the commencement of the process of engaging 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.

Hayattuddeen said by the deadline of April 21, 2008, BPE had harvested 15 EOIs and after stages of pre-qualification and upon technical evaluation of the pre-qualified prospective consortium, the number was finally scaled down to four. Meanwhile, the Director-General of BPE, Mrs. Irene Chigbue, has frowned on Transcorp, the present core-investor in NITEL/MTEL, for appointing a new chief executive officer without the board approval, promising to take them on the issue at NITEL’s board meeting which will soon hold.

According to her, “It is true, we read that Transcorp has engaged a new CEO, they are yet to bring that engagement process to the board of directors for approval. I think there is an imminent board meeting and at that meeting, the board will take its stand on the engagement process and the public will be aware of that.

“We have raised that issue with Transcorp that it is not very regular. Nonetheless, we take up this Transcorp dilemma at the board level. The ideal thing will be in accordance with the SPA, you nominate the CEO, and you bring that nomination. You are entitled to that appointment but you will still bring it to the board and the board will approve and even the plan on revitalisation should be approved also by the board.

Chigbue noted that, “the intention is that the Transcorp and the Federal Government will work in tandem. The board, she said, currently comprises Transcorp, Ministry of Finance Incorporated (MOFI), Ministry of Communications, and BPE in proportion to shareholding. She said: “The intention is for every body to work together.”

The Federal Government had in 2006 sold 51 per cent stake to Transcorp Plc and retained 49 per cent. The shareholders have, however, mutually consented to restructure the current shareholding and admit a core investor who will be offered a 51 per cent stake in the company.

In this regard, the 51 per cent will be contributed by both the Federal Government (22 per cent) and Transcorp Plc (29 per cent). This in effect will result in the dilution of Transcorp stake to 22 per cent while government retains 27 per cent. To accomplish the objectives, government had announced that it 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 will be expected, among others, to review the operations of NITEL and MTEL and prepare an Information Memorandum. The consortium will also prepare valuation reports that will give an indicative base price for the enterprise as well as prepare draft contract documents and all other transaction documents required for competitive and transparent bidding process. BPE had added that 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.

But Transcorp’s Vice President & Head, Corporate Relations, Adedayo Ojo, in a statement made available to THISDAY in Lagos yesterday said the Transcorp need not seek BPE’s approval before appointing a CEO for NITEL as explicitly stated in the shareholders’ agreement. Quoting a section from the shareholders agreement, Ojo stated: “Clause 3.12 and 3.13 of the shareholders agreement states that the CEO of NITEL will be appointed by Trancorp, while other executives will be appointed by the board.” 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 commenced operations in 1985. In 1996, the Federal Government created the Nigerian Mobile Telecommunications Limited (MTEL) to provide cellular services and thus transferred NITEL’s cellular operations, which it started providing in 1992 to MTEL.

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