NITEL sale to be ‘completed by September’

21 May 2009

The director general of the Bureau of Public Enterprises (BPE), Christopher Anyanwu, has said that all financial transactions relating to the sale of Nigerian incumbent telco Nigerian Telecommunications Limited (NITEL) will come to a close by September 2009. The initial timetable issued by the BPE states that NITEL resale transactions were scheduled for completion in the first quarter of the year but due to a number of disputes within the government and local company Transcorp, which owns 51% stake in the company, little progress has been made.

According to TeleGeography’s CommsUpdate, the federal government sold it 51% stake in NITEL to Transcorp for USD750 million in November 2006, retaining a 49% interest. Since then the telco’s 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. In February 2009 Transcorp agreed to divest part of its shareholding in the telco and in late March the BPE announced it was offering a 51% stake in the fixed line operator and 100% of its mobile unit. Earlier this month the bureau extended the deadline for the submission of bids for the telco from 4 May to 31 May and relaxed the requirements for the pre-qualification of interested investors.