NIGERIA Telecommunication Company (NITEL), has thrown open a bid for a strategic core investor who is expected to revamp the telecom company.
Transnational Corporation (Transcorp), which acquired 51 percent stakes of NITEL has been unable to turn the company around, a development that has made both parties, government and the former, reach a deal to cede some of their shareholding to a new core investor who is hoped to return the company to profitability.
Transcorp had originally launched a bid for 75 percent shareholding in 2006 in NITEL and its mobile business unit, Mtel.
This includes the bundled SAT-3, the Nigeria end of the undersea optical fibre transmission link built by a consortium of big international telecoms companies and other investors including NITEL.
The package was offered $750 million during the privatization undertaken by the Bureau of Public Enterprises (BPE).
Transcorp, which was only able to raise $500million out of the final offer price, eventually settled for 51 percent while government retained 49 percent.
Under the new deal, both parties have agreed to relinquish enough shares to give comfort to a new core investor “in the best interest of the industry, stakeholders and the Nigerian people”.
Consequently, Transcorp is ceding 29 percent of its current shareholding while government will dispose of 22 percent of its shareholding to give the new core investor 51 percent.
Following the flagging fortune of NITEL, after Transcorp acquired controlling stakes in the telecom company, both parties resolved it was necessary to bring in a new core investor with “requisite focus, technical expertise, managerial experience and financial capacity to take controlling shares in NITEL/M-TEL”.
Meanwhile, President Umaru Musa Yar Adua of Nigeria has approved a major proposal that will transfer government stakes in the Nigerian Telecommunications Limited (NITEL) to the Nigeria Communications Satellite Company Limited (NigComSat) and also allow the government-owned satellite bandwidth service provider offer direct service to subscribers.
Source: Daily Trust Nigeria
