Transcorp Relinquishes 51 Percent Equity Share in Nitel/Mtel

Mergers, Acquisitions and Financial Results

Two days after workers of NITEL and MTel called off their industrial action, the board of directors of the Transnational Corporation Plc has agreed to relinquish its 51 per cent equity holding in NITEL and Mtel. The workers have embarked on strike action to protest non-payment of their pension buyout and salary arrears owed them by government. The strike saw the closure of the SAT3 landing station run by Nitel.

The board of Transcorp, which is headed by Prof. Ndidi Okereke-Onyuike, took the decision at the Extraordinary General Meeting of the organization, which took place last week at Transcorp Hilton Hotel, Abuja. The decision of the board to relinquish its equity holding in the two telecommunication firms was to offset the company's indebtedness.

Describing it as a difficult decision to make, Okereke-Onyiuke said it became necessary in the best interest of the company in view of the huge challenge Transcorp has faced since the company was floated.

Lamenting the stiff opposition faced from government agencies due to negative propaganda that the company was funded by former president Olusegun Obansanjo, Okereke-Onyiuke said, "We have been cheated, made to look like aliens in our own country. Opposition has come from the very people we thought would nurture and protect us. They have placed every conceivable obstacle on our way."

She disclosed that the company was started with a N22 billion IPO as against sponsored media reports of government funding. Speaking further, she said, "In spite of the strong efforts made to take NITEL/Mtel from the company while leaving us with the debt, take the oil blocks and the hotel and finally force the company into bankruptcy and liquidation, the company has survived because of our belief in protecting our 250,000 shareholders".

While fielding questions from journalists, the GMD/CEO of Transcorp, Tom Iseghohi, stated that the purpose of the EGM was for a strategic review of the company's affairs and determines a way forward.

On the need to sell its 51 per cent share in NITEL/Mtel, Iseghohi said the company's effort to reposition NITEL since 2006 when it took legal possession of NITEL has been truncated by hostile government agencies, a situation he described as a huge distraction for the company as it has spent over 80 percent of its time on the NITEL issue, rather than explore other potentially viable investment areas.

In 2006, Transcorp acquired 51 per cent equity shares of NITEL/Mtel after several attempts to privatise the embattled companies failed at the cost of $500 million, with Federal Government retaining 41 per cent share.

Upon taking over the company in 2006, Okere-Onyiuke promised that her organisation would inject $2 billion to revive the embattled company, but it has not put the money in. As a result, its customer base has shrunk to 300,000 subscribers, down from 500,000.