Shares in Transcorp, the majority-owner of beleagured incumbent Nigerian Telecoms (NITEL), have been suspended by the Nigerian Stock Exchange (NSE) at NGN4.42 (USD0.04) each. They may still be traded, but the price will not change. Transcorp is thought to have around 250,000 mainly Nigerian investors. The suspension follows the reversal last week of the sale of 51% of NITEL and its cellular subsidiary M-Tel to Transcorp by the previous government in 2006, and has been done to prevent a massive dumping of shares by wary investors causing a price crash.
Despite a public commitment from Transcorp to inject USD1 billion into NITEL and M-Tel over two years for network rehabilitation, improvement and expansion, the Ministry of Information and Communications says that the new funds have not materialised and it has been approached by a number of foreign suitors, including Telkom and Vodacom of South Africa, Egypt’s Orascom, and France Telecom. A House of Representatives Committee has said it respects the decision to reverse the privatisation of NITEL, but had reservations that it could send out the signal that Nigeria was a risky place to invest, with the present government choosing to reverse a policy of the last administration.