Nigeria to Liquidate the State-Owned Telco Following Failed Privatisations
Published on: 3rd Mar 2012
Note -- this news article is more than a year old.
Following years of failed attempts to privatise the state owned telco, Nitel and its mobile network subsidiary, the Nigerian government has approved plans for a "guided liquidation" of the company.
The National Council on Privatisation (NCP) said that it approved the liquidation in view of the huge liabilities of both companies.
At its last meeting in December 2011, the NCP had considered the presentations made by the management of Nitel and Mtel on the way forward for both companies. The NCP had directed the management of Nitel and Mtel to submit detailed financial reports and other relevant information on the proposals for the resuscitation of both companies to the Technical Committee of the NCP; and tasked the Technical Committee to consider the submissions by Nitel/Mtel management and submit its recommendations to the next meeting of NCP.
The Technical Committee recommended that 'guided liquidation' should be adopted as there was no viable financial alternative presented by the management of Nitel/Mtel.
Local company, Transcorp bought a 75% stake in 2006 in Nitel for $750 million during an earlier privatization sale, but the government reclaimed the stake in 2009 following several years of neglect.
Since then there have been three aborted attempts to sell the company, with the last failing in June 2011 when the Omen International Consortium failed to pay a required USD105 million deposit on the sale.
The formal process for the liquidation of the company is still to be confirmed.