Efem Nkanga
19 November 2008
Lagos — Indications have emerged that the Nigerian Telecommunications Ltd (NITEL) may not get a core investor in February 2009 after all.
This is because the Bureau of Public Enterprise (BPE) is said to have decided to stop the consultant to the deal, BNP Paribas, from working further on the search for a core investor for NITEL.
Though the reasons for this action on the part of the BPE had not been made official, THISDAY gathered that BPE might have taken this position because it had suddenly discovered that getting a core investor for NITEL at this time may not be viable.
One reason is that the Federal Government which owns 49% of the shares in NITEL has whittled down its shareholding considerably by ceding 15% of the shares to the Nigerian Communications Satellite, NigComSat and 6.9% to IILL which had made part payment of $131 million to the FG in a bid to acquire NITEL in 2003, from the $1.3billion it offered to pay. The 6.9% represents the part payment paid.
While the FG had also offered 4% share to NITEL workers. This translates to a shedding of 25.9%, leaving the FG with 24.1%.
A source familiar with the deal disclosed that the realisation that it was working from a position of weakness and that head or tail might not get much from a core investor might be the reason why the BPE decided to stop BNP Paribas from going ahead with it. "They are confused as to where they want to go at this time, hence the call on BNP Paribas to stop work", said the source.
THISDAY further gathered that at a meeting held between officials of the BPE and Transcorp officials, the Bureau was said to have asked Transcorp's Group Managing Director, Tom Iseghohi, to cede its shares to the BPE for it to be offered to a core investor, a move which Iseghohi was said to have resisted, explaining that the request had to be tabled before the board before any decision could be made.
THISDAY also gathered that BPE had allegedly sold off the headquarters of NITEL in Wuse Abuja for an undisclosed sum.
The issue of the headquarters and other properties of NITEL had caused a dispute with Transnational Corporation, owners of NITEL with 51% equity on whether the property should be classified as core assets or not.
Attempts to get the confirmation of the order stopping BNP Paribas from working further on getting a core investor for NITEL from the Head, Public Communications of the BPE, Chigbo Anichebe, before going to press was not successful.
It will be recalled that the Federal Government through the National Privatisation Council had given BPE a nod to commence the search for a new core investor for NITEL.
This made it the fourth attempt by the FG to sell Nitel since it started in 2000. Government had stated that it was looking for an investor with the technical expertise, managerial experience and financial capacity to take controlling shares in NITEL/M-tel which has been sick for sometime..
The choice of BNP Paribas by the BPE had raised dust with many questioning the choice and questioning if the sale to a core investor will be transparent or not.
Many had predicted that the appointment of BNP Paribas, as the adviser to the process of transferring NITEL to a new core investor would yield no productive results mainly because BNP Paribas, was the same adviser when NITEL was sold to Transcorp in the first place before the FG decided that Transcorp was not good enough. NITEL had been mired in several controversies with the FG at one point reversing the sale of NITEL to Transcorp before reversing itself on the reversal.
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