Nigerian Federal Government returns Transcorp's Nitel Stake

Mergers, Acquisitions and Financial Results

The Transnational Corporation of Nigeria (Transcorp) has announced that the Federal Government (FG) has returned the 51% share of incumbent telco Nigerian Telecom (NITEL) to it following a meeting on Friday, reports Last week the government said it was reversing the 2006 sale of a majority stake in NITEL to Transcorp, in light of the telco’s lamentable performance. A statement from Transcorp said the following:

‘Our attention has been drawn to reports in some sections of the media, stating that Transcorp’s shares in NITEL [and its subsidiary cellco] M-Tel have been reduced to 10% This…is erroneous and totally misleading. Arising from the joint meeting between the FG and Transcorp, on 22 February 2008 in Abuja, it was agreed that both parties maintain the ownership structure and management of the companies. By this, Transcorp maintains its 51% ownership, while the FG holds 49%. In addition, Transcorp will continue to manage both companies under the leadership of the Board of Directors as presently constituted by Transcorp. This ownership structure will remain in place until both the FG and Transcorp secure a new core investor with the requisite focus, technical expertise, managerial experience and financial capacity to take controlling shares in NITEL/M-Tel. At that time, the FG and Transcorp will divest 24% and 27% respectively …to the new core investor in line with the initial December 2007 agreement.’