NITEL BUYER TRANSCORP FAILS TO MAKE $500M DOWN PAYMENT
Transnational Corporation Plc (Transcorp), preferred bidders in the negotiated sale of Fed-eral Government’s owned Nigeria Teleccomunications Limited (NITEL) may have started to renegotiate the terms of the deal.
Transcorp last week agreed to buy the ailing NITEL for $750 million. The terms of the deal provides that $500 million be paid as at midnight last Thursday while the balance of $250 million be paid subsequently. However, Transcorp was only able to pay $75 million representing 10% of the agreed sum to the Bureau of Public Enterprises (BPE).
Nigerian local newspaper This Day gathered that the part payment of $75 million by Transcorp, which fell far short of the agreed sum was done in good faith while the corporation opens a window for renegotiation of the deal.
It was gathered that the renegotiation may include the downsizing of Transcorp’s holding from 75% (made up of 51% to Transcorp and 24% to a foreign technical partner) to 38% to Transcorp and 37% to a foreign technical partner. If the BPE accepts, this will effectively reduce Transcorp’s equity holding from 51% to 38% while upping that of the technical partner from 24% to 38%. In the meantime, the corporation is buying time to raise the agreed sum.
Under the terms of the negotiated deal supervised by the Bureau for Public Enterprises (BPE), Transcorp was required to pay $500 million within seven working days of the official notification of the bid results and the balance of $250 million within 60 working days or lose the bid to acquire the firm.
This Day checks revealed that while officials of the BPE kept vigil Thursday night, in anticipation of a $500 million cheque in line with the terms of the negotiated sale agreement, the Transcorp team arrived Abuja a few minutes before midnight only to present a cheque of $75 million dollars representing 10% of the deal.
The cheque was conveyed along with a letter seeking an extension of the payment deadline ostensibly, to enable the new investors and the Federal Government “iron out some grey areas and put finishing touches” to the Share Purchase Agreement (SPA).
Head, Public Communications, BPE, Chigbo Anichebe while confirming receipt of the payment said the Bureau will forward Transcorp's request to the National Council on Privatisation (NCP), the agency of the Federal Government empowered to grant such concessions or revoke any deal considered to have breached the rules of the privatisation exercise.