FG, Transcorp Strike Deal On NITEL

By Luka Binniyat

5th Mar 2008

Anxiety over Transcorp’s hold on NITEL may have come to an end as government and officials of the private investment vehicle agreed yesterday to bring in an investor equipped with financial and technical capacity to raise the fortunes of the company.
This corroborates Financial Vanguard’s lead story of yesterday.
Emerging from a protracted meeting, a relieved Communications and Information, Mr. John Odey, announced that

Transcorp would retain its 51 per cent hold on the company while government’s 49 per cent would also remain. However, both parties agreed to immediately bring in a new technical partner that would add value to the embattled NITel and its mobile subsidiary.

“For the avoidance of doubt, we want to restate clearly that under the share purchase agreement, Federal Government has 49 per cent and Transcorp has 51 per cent in NITEl and M-tel. Transcorp will continue to own 51 per cent and manage both organisations until a new core investor is identified,” Odey said.

The decision, the minister explained, was to ensure that both companies were powered to the level where they were able to provide robust services and the much needed backbone infrastructure for the country.

The Transcorp hold on NITEL seemed to have hit the rocks weeks ago when the government announced that it was relieving Transcorp’s hold on NITEL because of its inability to fully activate the former monopoly. This action drew the ire of the public which was outraged about the manner the government handled serious issues like privatisation which earned the country much respect from the international community.

The outrage may have led to a fence mending meeting yesterday, from which Odey and the Transcorp boss emerged relieved.

The decision reached yesterday, the minister informed, was mutual as both parties desire additional funding and telecom expertise that would come from a new core investor who is an industry player, with the appropriate technical expertise, managerial experience and financial capability to reposition both NITEL and M-tel.

Although Odey said only the National Council on Privatisation (NCP) could say when or how a new investor will emerge, he noted, however, that the core investor would not get anything less than 51 per cent of the NITEL share.

Source: Vanguard

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