Nigeria's government has approved the sale of the state telecommunications company, Nitel, to Dubai's Minerva Group and its partners, eight months after the group bid $2.5 billion (about R17.1bn) at an auction.
The consortium would pay $750 million as a precondition for the issuance of the offer letter, followed by the remaining $1.75bn within 60 days, the Abuja-based Bureau of Public Enterprises, which oversees state asset sales, said yesterday.
The government would sell a bond to pay outstanding wages owed to Nitel's workers, the bureau said.
New Generation Telecom, consisting of China Unicom (Hong Kong), Minerva Group of Dubai and Nigeria's GiCell Wireless, won the bidding for 75 percent of Nitel, on February 16. President Goodluck Jonathan suspended the transaction on March 12 and told a committee including senior ministers to conduct further due diligence on the bidders.
Jonathan ordered the review after China Unicom, China's second-biggest cellphone carrier, denied any involvement in the winning group. The Chinese operator later said one of its units was interested in "providing technical and managerial support".
In April, the head of the Bureau of Public Enterprises, Bolanle Onagoruwa, urged Jonathan to award Nitel to New Generation. Failure to do so would send the wrong signal that Nigeria could not abide with "simple processes and procedures", Onagoruwa said in a letter to the president.
A previous attempt in 2006 to sell Nitel to Transnational Corporation was annulled after the Lagos-based investment company failed to comply with sale conditions.
Since then, Nitel's 500 000 fixed lines in service had dropped to 45 000, its workforce had declined to 2 000 from 12 000 and the company had $500m of debt, TeleGeography, a Washington-based research company, said last year.
Nitel has lost market share to rivals including MTN Nigeria, a unit of MTN Group. Nigeria is Africa's most populous nation with more than 140 million people. - Bloomberg