Nigeria - At Last, the Federal Government Approves Liquidation of NITEL, M-Tel
The Federal Government has finally approved the adoption of “guided liquidation” strategy for the privatisation of Nigerian Telecommunications Ltd (NITEL) and its mobile arm, M-Tel because of the huge liabilities of both companies.
The Bureau of Public Enterprises (BPE) had last year said government was considering a guided liquidation of the firm should the reserve bidder, Omen International, fail to pay the $105 million bid security by Friday, June 17. Omen defaulted.
Consequently, the National Council on Privatisation (NCP), which okayed the liquidation at a meeting in Abuja, also approved that the Technical Committee (TC) and Legal Committee (LC), two standing committees of NCP, work closely to determine the modalities for handling NITEL /M-Tel’s guided liquidation.
The NCP has further directed that all liquidators that have unresolved disputes with the BPE be excluded from the process for the appointment of a liquidator for the Nitel/Mtel transaction.
At its last meeting on December 15, 2011, it had considered the presentations made by the management of NITEL and M-Tel on the way forward for both companies.
To this end, the NCP had directed the managements of NITEL and M-tel to submit detailed financial reports and other relevant information on the proposals for the resuscitation of both companies to the TC of the NCP and tasked the TC to consider the submissions by NITEL/M-tel management and submit its recommendations to the next meeting of NCP.
However, the TC recommended that "guided liquidation" should be adopted as the strategy for the privatisation of NITEL/M-Tel in view of the huge liabilities of both companies and that there was no viable financial alternative presented by the management of NITEL/M-tel.
The NCP supported the recommendation of the TC that opted for liquidation.
According to a statement signed by spokesman of BPE, Chukwuma Nwokoh, a copy of which was made available to ThisDay, the NCP had also observed from the NITEL/M-tel presentation that they were receiving some revenues from SAT-3 which were not fully accounted for and in respect of which there had been no audit for several years.
The statement added: “In spite of the revenues, the management of Nitel/Mtel had been obtaining their salaries from the Federal Government of Nigeria. Consequently, the NCP directed the Sub-Committee of the Technical Committee on Information, Communication, National Facilities and Agric Resources to immediately carry out investigations and ensure that all revenues received were accounted for.”