NITEL: FG, Transcorp Open Talks With Vodacom

By Everest Amaefule

12th Mar 2008

There were indications on Monday that the Federal Government and Transnational Corporation have initiated moves to bring in Vodacom of South Africa as core investor in the Nigerian Telecommunications Limited and its mobile subsidiary, the Nigerian Mobile Telecommunications Limited.

Group Managing Director/Chief Executive, Transcorp, Mr. Tom Iseghohi

The Federal Government, which currently holds 49 per cent equity, and Transcorp, which holds 51 per cent equity in the telecom companies, had recently agreed on the need to bring in a new core investor that had the expertise and resources to turn around the First National Operator.

According to the terms of the agreement, the new investor would be offered 51 per cent equity to enable it have a firm control of the management and operations of the telecom companies.
The 51 per cent will be contributed by the Federal Government, 24 per cent; and the Transcorp, 27 per cent. This will leave the Federal Government with 25 per cent, while Transcorp will retain 24 per cent.
Apart from Vodacom, which had at a time shown interest in NITEL along with its parent company, Telkom of South Africa, our correspondent learnt that two other European companies are also being spoken to as potential investors in the telecom firms.

The 25 per cent equity left for the Federal Government may be split between the Nigerian Communications Satellite Limited and Investors International of London Limited.

These are part of the recommendations of the Technical Committee of the National Council on Privatisation headed by the Vice-President, Dr. Goodluck Jonathan. IILL had bid $1.317bn for 51 per cent equity in NITEL in the first attempt to sell the company in 2002. However, it could not raise the money to pay for the shares when the Bureau of Public Enterprises invited it to pay.

t lost the $100m it had paid as deposit for the transaction, and this might have formed part of the reasoning to accommodate the company in the new shareholding arrangement.

Source: Punch

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