Nitel: Amid search for new core investors, FG to give stakes to IIL

Mergers, Acquisitions and Financial Results

The Federal Government plans to transfer stakes in the national incumbent, NITEL to Investors International Limited (IIL), the London-based consortium that had in 2001 made a botched $1.317 billion bid to buy the telecoms company.

Technology Times believes that the government plans to cede about 7 per cent shareholding of its 49 per cent stakes in the company may not be unconnected with the outcome of international legal battle waged by the business promoted by businessman, Bode Akindele.

Lately, battle for control of stakes in Nitel has intensified following the inability of Transcorp, which was sold 51 per cent of NITEL to reposition the telecoms company to compete in the new wave of telecoms revolution set off by the introduction of commercial mobile telephony services in August 2001.

Ahead of the planned concession to IIL, President Umaru Musa Yar Adua had approved a major proposal to also grant 15 per cent of government’s 49 per cent stakes in NITEL to the Nigeria Communications Satellite Company Limited (NigComSat) while also allowing the government-owned satellite bandwidth service provider offer direct service to subscribers.

Akindele’s ILL had in 2001 been offered 51 per cent stakes in NITEL in a bid codenamed “Flagship Transaction” by government privatisation agency, the Bureau of Public Enterprises (BPE) as part of measures to complete the liberalisation of the hitherto monopoly telecoms sector in Nigeria.

ILL’s higher offer over rival bidder, the Telnet Consortium, was to run into stormy waters when the consortium, a mix of Nigerian shareholders and Portugal Telecom, failed to raise the balance of $1.317 billion, within regulatory time frame set to close the deal.

ILL which had paid 10 per cent of its $1.317 billion winning bid through a combination of $100 million loan from First Bank and its shareholders faced challenges in raising the balance within the stipulated period based on what analysts reckon as the general recession in the global telecoms sector following the auctions of new licences and what was perceived as “cautious approach” to investments in Nigeria by the international investment community after the period following years of military governance.

Under its partnership with Nigerian Internet Service Provider, Linkserve, in partnership with U.S.-based ViaSAT, NigComSat is providing bandwidth for cost-effective broadband service across the country, says Chairman, Linkserve, Chima Apugo Onyekwere, in the wake of the MoU signed by both organisation earlier in the year.

Technology Times