IDG News Service reports that the Nigerian Senate is to probe the lending of NGN75 billion (USD61.1 million) to Transnational Corporation (Transcorp) in 2006 by a consortium of banks, less than a month after it bought a majority stake in incumbent telco Nigerian Telecommunications (NITEL), the national telecoms operator. The Senate Committee on Communications wants to know why Transcorp asked for a loan so soon after purchasing the holding. The investigation will not delay the current plan to sell part of Transcorp’s controlling share of NITEL. The sale will be preceded by a public hearing to ensure that only a company with the necessary technical and financial expertise acquires the stake, and is expected to go ahead in February 2009, with the winner taking control of the incumbent in late May 2009.
In 2006 Transcorp secured a NGN75 billion loan from a consortium of banks including Union Bank of Nigeria, Zenith and First Bank of Nigeria, to pay for the 10% deposit it had to put down on its 51% stake in NITEL.