Privatisation agency appoints NITEL liquidator

12 Jul 2013

Nigeria’s National Council on Privatisation (NCP) has appointed a liquidator for indebted fixed line incumbent Nigerian Telecommunications (NITEL) and its mobile arm M-Tel, Reuters reports. Joe Anichebe, spokesman for the Bureau for Public Enterprises (BPE), was cited as saying that the council has hired Olutola Senbore, who has six months to set up the guided liquidation process. ‘The reason we choose to go through the liquidation option is because the expected proceeds from the sale [are] likely going to be less than its [debts’] value,’ said Anichebe. The privatised company will effectively be debt free, with creditors taking a loss on the remainder owed to them; the government will not make up for the difference in value to settle any outstanding liability. Anichebe added that NITEL owes creditors, which are mainly suppliers, around NGN400 billion (USD2.47 billion) and the liquidation process is aimed at protecting the government from future claims and liabilities. The announcement follows local press reports that the Senate opposes the BPE’s planned liquidation of NITEL.

TeleGeography’s GlobalComms Database notes that the federal government approved the adoption of a guided liquidation strategy for NITEL and M-Tel in March last year, following a series of failed attempts at selling the indebted state-owned telco. In June 2011 the latest attempt to privatise the firm was cancelled when the reserve bidder, British Virgin Islands-based Omen International, failed to meet the deadline to pay its USD105 million bid security. Omen was invited to re-register its interest in buying NITEL in March 2011, as the preferred buyer New Generation Telecommunications repeatedly missed payment deadlines for its bid of USD2.5 billion. Omen offered USD956.9 million during the latest attempt to privatise the company, held in February 2010. The government began seeking a buyer for a minimum 75% of NITEL and 100% of M-Tel in July 2009 after previous majority shareholder Transcorp divested its stake earlier in the year.

Nigeria, ntel (formerly NITEL/M-Tel)