CASH- STRAPPED NITEL GIVEN N14 BILLION LOAN APPROVAL BY BPE
Cash-Strapped Nigerian Telecommunications Limited has secured the nod of the Bureau for Public Enterprises to draw on the controversial N14 billion syndicated loan for it by some local banks.
In effect, prospects have brightened for the company's plan to instal 250,000 lines in Lagos, among other things.
NITEL’s Deputy General Manager, Corporate Communications, Mr. Tayo Ekundayo, confirmed that the BPE had written the telecom company that it could begin to draw down on the loan facility.
On October 8, this year, NITEL signed a Memorandum of Understanding for a N14 billion loan with local banks. City Bank acted as the lead arranger, while banks that participated in the syndication included First Bank and Union Bank.
BPE had, on the heels of that agreement, written to tell NITEL that it could not draw on the facility because it had no clearance from National Council on Privatisation.
The privatisation agency also argued that it would not want NITEL’s debt profile to be over bloated, since the company is in the process of being privatised.
Ekundayo said although the restriction on drawing the loan caused stress and embarrassment to NITEL, meeting the conditions for securing NCP’s approval has made the company better off.
"Now everybody knows what we want to do with the money and securing the approval for the loan invariably means an endorsement of our business plan," he said.
But NITEL Managing Director, Rein Zwolsman, told our correspondent that drawing down on the facility would not be automatic.
“We were just about to draw down when we were stopped. Now we have to go to the bank and talk to them again so that we can renew the process,” he explained.
He told our correspondent that the priority of the company remained paying the mobilisation fee to get equipment suppliers, Huawei and Siemens, commence work on the company’s 250,000 lines in Lagos.
“We need to invest heavily. Any telecom company that does not invest is dead,” he added.