FG revokes NITEL, MTel sale to Transcorp
Written by Leke Adeseri with agency reports
Tuesday, 02 June 2009
ABUJA — THE Federal Government yesterday directed the immediate revocation of the sale of NITEL and M-Tel to Transnational Corporation of Nigeria (Transcorp) Plc.
The revocation order was issued at the end of a meeting of the National Council on Privatisation (NCP), presided over by its chairman, Vice President Goodluck Jonathan.

Reacting, Transcorp appealed to the BPE to rescind its decision in the interest of justice.

Briefing newsmen at the end of the meeting, the Minister of State for Information, Alhaji Aliyu Bilbis, said the sale was revoked because Transcorp breached the terms and conditions of the Shares Sales Purchase Agreement (SSPA).

“In the consideration of the serious breaches of the terms and conditions of the SSPA, Council agreed that, Transcorp has vitiated and voided the contract in its entirety.

“Consequently, Council has approved the immediate revocation of the sale of NITEL/MTel to Transcorp,” he said.
Bilbis said the Council also approved the constitution of a Technical Board to manage the affairs of the two organisations until a new core investor was engaged by NCP.

“It also approved the immediate stoppage of further sale of the assets of the organisations as well as a provision of adequate security to all their facilities to prevent any further asset-stripping,” he said.

The particulars of breaches by Transcorp as highlighted by the Council included the exiting of British Telecommunications as the technical operator, which was a condition precedent in the SSPA.

The minister also alleged that Transcorp failed to inject the sum of N8.9 billion cash into NITEL within 100 days of taking it over to address the immediate liquidity problem facing the organisation.

“Transcorp was also alleged to have failed to pay interconnectivity debt totaling about N17 billion as well as staff salaries in the past 11 months.

“The Council also alleged that Transcorp failed to maintain NITEL/MTEL as a going concern, resulting in complete loss of market share from 15 per cent to 0.03 per cent,” he said.

NITEL sale void —BPE

Also briefing newsmen after a meeting of the National Council on Privatisation, Mr Christopher Anyanwu, its Director-General, said that the sale had no effect and had been voided.

“The sale of NITEL and MTEL is withdrawn. I mean the government has withdrawn from it. The sale had no effect. It is void and doesn’t exist, if it ever existed, it is hereby revoked,’’ he said.

“There were many conditions, which Transcorp was to fulfill while assuming the management of NITEL which it never fulfilled.

“Barely four months after they took over the management of NITEL the British Telecom opted out for whatever reasons.

“They also undertook to inject N8.9billion within the first 100 days they took over the company, but they failed to do that because they did not have the cash.

“They also undertook, in the agreement with the government, to pay the staff salaries. As I speak to you, salaries of the NITEL staff are in the arrears of 11months.

“They also undertook to maintain NITEL and MTEL and make sure that NITEL was up and running and improve on its market share, but what we have today is that NITEL is almost not functioning,’’ he said.

Anyanwu added that it was based on the failure, that the council decided to withdraw the sale adding that Transcorp has given the power of attorney to go ahead.

He said that government decided to form a technical board to manage the affairs of NITEL while trying to engage a new core investor.

“Government has also ordered the stoppage of further sales of NITEL assets for whatever purpose, core, or no core assets. Nobody is empowered to sell NITEL assets.

“The council also approved the provision of adequate security to all NITEL and MTEL facilities to prevent any further assets take over,’’ he said

Ayanwu said that measures had been put in place to ensure that the salaries of employees were paid.

“With the present situation, new core investor may emerge before September,’’ he said.

He added that the BPE was not aware of the seven million dollars owed NITEL by First Bank Plc. as alleged by some employees of NITEL

He said the Federal Government currently owns NITEL 100 per cent.

Transcorp begs BPE to rescind decision

However, Transcorp’s Head, Corporate Relations Departmnet, Ezedi Udom, in a said the company “has received with shock a letter from the Bureau of Public Enterprises (BPE), purportedly revoking the sale of NITEL to Transnational Corporation of Nigeria (Transcorp) plc.

“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/Mtel 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 on its decision in the interest of justice and for the quick realization of the sale of NITEL/Mtel.”

Transcorp made entry into the Nigerian economic landscape in 2006 as a mega corporation with the aim of becoming a multinational institution.

It acquired majority equity in NICON Hilton Hotel, now Transcorp Hilton Hotel and the first telecom national carrier, NITEL and M-Tel, its subsidiary.

Transcorp, on Dec. 26, 2006 went to the capital market to raise N60 billion, but got only N22 billion.
The Director-General of the Nigerian Stock Exchange, Mrs Ndi Okereke-Onyiuke, doubles as the chairman of Transcorp Plc, while Mr Tom Iseghohi, assumed office as its Group Managing Director in June 2007.

On May 6, Iseghohi; Transcorp Company Secretary, Buba Mohammed and the Head of Shared Services, Mike Okoli were arrested by the EFCC and arraigned before a Federal High Court, in Abuja on multiple charges of corruption.
The accused persons have yet to regain their freedom.

mbulela:

the amount of confusion in this govt is frightening.
how can anybody be convinced to invest in such a confusing environment?

mbulela:

the amount of confusion in this govt is frightening.
how can anybody be convinced to invest in such a confusing environment?

mbulela:

biina, how can you say that?
is it today that BT pulled out of the technical partnership?
is it today that Nitel and Mtel staff stopped being paid?
just weeks back a road show was done by BPE (a parasatal of FG) in London for core investors into Nitel/Mtel.
then weeks and days later you revoke the sale.
it just does not make sense and does not show that decisions are properly thought out.
the level of planlessness and indecision in this govt is frightening.
look at all the rumour peddling, anxiety and uncertainty that was displayed in this Sanusi matter.
what stopped him (i mean the guy called yar adua) sending the name to senate 5 wks ago, having done all the necessary security checks?
he just realised that soludo's contract expires this week?

Frank-C:

I think the question should be what does Yar'Dua really want out of this whole thing? The unfortunate answer seem to be nothing. He is just confused. That is my worry. Had the revoke of the sale of NITEL been part of an elaborate plan to make the company more productive, then i would not mind. But i don't just understand. We have seen YRD revoke many OBJ policies and replace them with nothing; not even with worse policies. Look, i think that Obama already have an opinion about how this whole GM motors issue should end and whatever he is doing now is just providing leadership to the end he BELIEVED in. Ours is different. Our president is as confused on the way foward as you and i. I am so ashamed of this man, i remember i once believed he is the solution. Now, i think differently. Tomorrow, he'll start losing sleep over NEPA or complaining about Nigeria's non attendance of G-20 meeting. **Sighs!!!!***

netotse:

@biina
this wont be the first time the sale of nitel to ____ is being revoked and then a technical board would be put in place to further run the company down. . . once and for all they shld sell it to a befitting investor and stop bellyaching!

@biina
this wont be the first time the sale of nitel to ____ is being revoked and then a technical board would be put in place to further run the company down. . . once and for all they shld sell it to a befitting investor and stop bellyaching!