New sale date for arivia

By Kimberly Guest for arivia.kom
Johannesburg, 23 Apr 2008

Transnet CEO Maria Ramos has confirmed industry speculation that there are only two bidders left for beleaguered IT outsourcer arivia.kom.

Late last year, ITWeb revealed rumours were heightening that the deal could be derailed. It was suggested that three of the five initial short-listed bidders had withdrawn their bids. Only Dimension Data and T-Systems were believed to still be tendering for the state-owned IT service provider.

At the time, Transnet spokesperson John Dludlu declined to comment on the speculation, stating only that the process "remained on course".

Transnet, a 41.5% shareholder in arivia and, by all accounts, leader of the privatisation bid, this morning refused to divulge which two companies remained at the table.

Speaking this morning, Ramos admitted the privatisation process was "behind" but said there were reasons for the delay.

Pushing for maximum

"We are trying to extract the maximum value for our stake in arivia. That is why there have been delays. I want a good deal. For the same reason, I won't tell you how much I hope to get for arivia. I want the maximum possible and putting our views out in the market could limit our ability to do so," she explained.

Ramos denied that operational problems surrounding arivia's majority shareholder, Eskom (58.5%), was slowing down the process any further. Instead, she said the deal was seeing movement.

"The two companies are still busy with the due diligence process, but this should be completed within the next two or so months. We are expecting to have everything finalised by September of this year; I am confident that we can conclude the deal by this new date," commented Ramos.

Transnet would not comment on the structure of the deal, or the details of the outsourcing contracts, which are believed to be arivia's major attractions.

Market observers previously speculated that bidders may be more interested in securing the IT outsourcing contracts for Eskom and Transnet, rather than to buy arivia as a going concern.

At the start of the sales process, government included two five-year outsourcing contracts, worth around R400 million and R200 million a year for Eskom and Transnet, respectively.