Nigerian Politicians Oppose Liquidation of State Owned Telco
Published on: 25th Apr 2012
Note -- this news article is more than a year old.
Nigeria's Senate has opposed plans to liquidate the state owned telecom network, Nitel following repeated failures to privatise the company.
The Chairman of the Senate Committee on Privatisation, Senator Gbenga Obadara critisied the privatisation authorities for talking up the company's debts and not promoting the value of its assets.
However, the Director-General of BPE, Ms Bolanle Onagoruwa, told the Senators that Nitel and its mobile network subsidiary, Mtel has debts of N351 billion (USD2.2 billion).
She noted that the company has been moribund for the past three years and that much of its assets are outdated and its negligable market share makes a sale to a commercial operator impossible.
Senator Obadara accused the government of deliberately running the company down and said that members of the committee would undertake their own assessment of the company's assets to ascertain its value.
He also suggested that the N179 billion of debt that is owed to the government should be written off in order to make the company more appealing to investors.
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.