Arivia tender expected 'in weeks'

Parastatal IT services outsourcing group arivia.kom will be placed on the open market within a few weeks, as work is being concluded on the request for proposals.

This comes after the Department of Public Enterprises (DPE) last year announced transport and electricity utilities Transnet and Eskom would shed their entire shareholding in the company, through public tender.

Transnet GM of corporate communications John Dludlu also revealed several unsolicited bids have already been received for the company, despite market speculation that the company's parastatal culture and financial woes could scare away potential buyers.

However, he refused to be drawn on details about these bids, saying only offers received in response to the tender invitation would be considered.

"We plan to run a fair and a transparent process that will inspire confidence in all participants," Dludlu states.

Transnet and Eskom initially placed a March 2007 deadline on the sale, and Dludlu states: "We have no reason to revise our timetable at this stage."

While the DPE, which is driving the sale under its strategy to see all parastatals disinvest from non-core businesses, is keen to see a tier-one service provider buy the company, Dludlu says it is unlikely any conditions would be attached to the sale.

"Details of the qualifying criteria, as well as the evaluation scorecard, will form part of the disposal process contained in the public invitation for bids. Therefore, it is premature to talk of any - if at all - conditions at this stage," he points out.

Dludlu also notes it is unlikely the shareholders would insist on conditions such as a moratorium on retrenchments, or that the company be kept as a single entity for at least some period after the privatisation.

He would also not be drawn on the operational and financial health of arivia, saying advisors for the disposal process will be appointed to perform a due diligence study on the company. This process will be concluded first before details about the company are released to potential bidders.

Last year, second national operator Neotel denied it would be interested in buying the parastatal IT group, despite being named as a potential buyer by several market observers. Choice Technologies, EOH, GijimaAst, Faritec and Datacentrix have also been identified as possible investors.

Executive head of Eskom Telecommunications Kiruben Pillay has been appointed as acting CEO of arivia to head up the interim management team. His appointment, following the resignation of Zeth Malele at the end of October last year, was a move by the shareholders to be closer to the operational side of the company and have more influence on the process.

Last year, Pillay said government is seeking to exit the company in a "responsible manner", and would ideally like to see a tier-one service provider buy arivia. There is no interest in selling to a "pure investor", he said, adding that the long-term sustainability of the company needs to be ensured before the parastatals withdraw from the company.