The shareholders of local firm Transnational Corporation (Transcorp) have approved the divestment of part of its 51% shareholding in former telecoms monopoly Nigeria Telecommunications (NITEL). The sale process will happen gradually over the next six months and will offset the corporation’s debt to commercial banks totaling around NGN85 billion (USD595.1 million). Transcorp acquired its 51% stake in NITEL and its wireless subsidiary M-Tel for USD750 million in November 2006, resulting in the privatisation of the telco. Since then the telcos initial 500,000 fixed lines in service have dropped to about 45,000, its workforce has declined from 12,000 to just 2,000 and the company is USD500 million in debt. Furthermore, unpaid salaries in the last 11 months led to workers going on strike and the shutting down of the company’s main source of income, the undersea cable link SAT-3.
The Federal Government holds the remaining 49% in NITEL and last year announced plans to sell 22% of its stake, however progress has so far been limited.