Nigeria Makes Another Attempt At Selling State-Owned Networks
Published on: 13th Jul 2013
Note -- this news article is more than a year old.
Nigeria's National Council on Privatisation (NCP) has formally appointed a liquidator to sell the assets held by the state owned landline network, Nitel and its MTel mobile network subsidiary.
The company has been essentially bankrupt for several years, and attempts at privatising it have repeatedly broken down.
Eight companies tendered to handle the liquidation of the company, and the contract was awarded to Lagos based accountants, Olutola Senbore & Co. They have been given six months to handle the sale.
It is expected that the two companies will be sold as going concerns, although it is expected that the mobile network would be sold for its assets, while the landline network may be picked up by one of the mobile networks in order to boost their backhaul capacity.
The sale is not expected to realise enough to pay off the state-owned firms debt, which is said to be around USD2.2 billion. The two privatised companies will be sold on a debt-free basis, with creditors being expected to absorb most of the losses.
Some Nigerian politicians have opposed the sale, saying that despite a decade of losses, that the government should make another attempt at turning the two companies around.
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.