Abuja — The Federal Government yesterday announced the revocation of the sale of Nigerian Telecommunications Limited (Nitel) and its mobile subsidiary, M-Tel, to Transnational Corporation (Transcorp) Plc, citing "breach" of contractual terms.

It has also put a stop to further sale of Nitel/M-Tel's assets and made provision for adequate security to all Nitel/M-Tel facilities to prevent any further asset-stripping until a new investor is found.

But Transcorp has kicked against the revocation, hinting at legal tussles that may follow the order.

The revocation came at the meeting of the National Council on Privatisation (NCP) presided over by Vice-President Goodluck Jonathan at the Presidential Villa, Abuja.

Briefing State House Correspondents at the end of the meeting, the Minister of State Information and Communications, Alhaji Ikra Bilbis, said the government decision was based on the failure of Transcorp to meet the conditions under the sale of the telecommunications companies.

He said a technical board would be put in place to manage the affairs of the moribund telecommunications companies until a new core investor was engaged.

Transcorp was alleged to have contravened the conditions under the Shares Sales Purchase Agreement (SSPA) entered into for the sale of the telecommunications companies in 2006.

Bilbis said: "Exiting of British Telecommunications (BT) as the technical operator, which is a condition precedent in the SSPA, failure of Transcorp to inject the sum of N8.9 billion cash into Nitel within 100 days of its takeover to address the immediate liquidity problem facing Nitel and failure to pay interconnectivity debt totalling about N17 billion, were considered as serious breach of terms entered into with Transcorp."

Others include the inability of Transcorp to pay staff salaries in the past 11 months and failure of Transcorp to maintain Nitel/M-Tel as a going concern, resulting in complete loss of market share from 15 per cent to 0.03 per cent.

"Council therefore agreed that Transcorp has vitiated and voided the contract in its entirety. Consequently, council approved the immediate revocation of the sale of Nitel/M-Tel to Transcorp, the constitution of technical board to manage the affairs of Nitel/M-Tel until a new core investor is engaged by NCP; the immediate stoppage of further sale of Nitel/M-Tel's assets and the provision of adequate security to all Nitel/M-Tel facilities to prevent any further asset-stripping," Bilbis added.

Director-General of BPE, Mr. Christopher Anyanwu, said the government was considering a technical management board to take over the activities of both organisations pending the conclusion of the sale of Nitel to a core investor.

Anyanwu stated that since the NCP was acting in consonance with Transcorp, the process would generate rancour or legal entanglements especially as the power of attorney had been secured.

The Council, according to him, secured the power of attorney when the government and Transcorp agreed to pool shares together for a new core investor.

On the $500 million paid for the 51 per cent equity of Nitel by Transcorp, he said all financial issues would be adequately addressed.

In a statement signed by Transcorp's Head of Corporate Relations Department, Ezedi Udom, the company said it received "with shock" a letter from BPE "purportedly revoking the sale of Nitel to Transnational Corporation of Nigeria (Tran-scorp) plc."

According to him, "Transcorp regards the action as unnecessary and at variance with the position of all the stakeholders of Nitel, who had jointly agreed that Transcorp should give its power of attorney to BPE to facilitate the sale of Nitel/ M-Tel to a new core investor, an action which Transcorp promptly carried out last week.

"Transcorp fears that the purported revocation of the sale of Nitel may prompt a chain of events that could ultimately jeopardise the sale of Nitel to a new core investor. It will be recalled that the first purported reversal was generally agreed to be counterproductive as it caused a huge setback to efforts aimed at transforming Nitel.

"This latest revocation is coming on the heels of recent successes recorded in the turnaround efforts of Nitel which resulted in the coming alive of the network in some parts of the country recently.

"Transcorp hereby calls on the BPE to rescind its decision in the interest of justice and for the quick realisation of the sale of Nitel/ M-Tel."

Nitel is heavily indebted and its fixed lines have declined to less than 100,000 from four times that figure in 2001.

M-Tel subscribers have also fallen to a few thousands from 1.3 million amid fierce competition since Transcorp took over.

THISDAY reported last Saturday that telecommunications giant and the nation's Second National Operator (SNO), Globacom, was top of the list of prospective investors aiming to acquire Nitel/M-Tel.

The NCP had on February 26 approved the advertisement for Expressions of Interest (EoIs) inviting core group/strategic investors to acquire a 51 per cent equity stake in Nitel.

The telecoms firm was put up for sale last year after the Federal Government said Transcorp, which acquired it in 2006, was turning it around.

Meanwhile, M-Tel workers yesterday called off their seven-month-old strike embarked on to protest the non-payment of salaries and allowances by Transcorp.

The Chairman of the Senior Staff Association of Communi-cation, Transport and Corporation (SSACTAC) Abuja branch, Mr. Sulaiman Awallo, said the decision to suspend the strike which commenced in November 2008 was taken in order to enable the management of the company to pursue the payment of outstanding salaries and allowances to the workers.

"We decided to suspend the strike for two weeks to enable our management team pursue the payment of our outstanding salaries and allowances. You know Transcorp is in disarray but we consider it necessary to allow them to convey so as to meet as a team.

"But if they fail to make meaningful progress during the first two weeks, we will re-convey and take another decision on what to do next," he said.

THISDAY gathered that the company had over the past few months, lost property worth millions of naira to some of its creditors following the company's inability to meet its financial obligation.

Some of the properties carted away include two vehicles and about three generators.

The creditors had earlier got court injunctions to confiscate the properties of the company to enable them to recover the debts accrued by the company.

In line with the directive given by President Umaru Musa Yar'Adua on the payment of N17 billion to the disengaged workers, the Office of the Accountant-General of the Federation will on June 8, 2009 commence the verification of the disengaged workers who have attained pensionable year in the service.

The money, according to BPE, is to be sourced from the proceeds realised form the sale of non-core assets of both companies which was carried out by Adekanola & Co.