Like the exercises before it, the celebrated priva­tisation of the Nigeria Telecommunications Limited (NITEL) and its mo­bile arm, MTEL, is heading for the rocks. The plan of its new owners, NATCOM Telecommunica­tions, to join the league of suc­cessful telecom providers in the country is being hampered by lack of funds and other unan­ticipated challenges.

Investigations by the AU­THORITY revealed that cal­culations and projections by NATCOM Telecommunica­tions, the investment vehicle for the purchase, which emerged the lone bidder for the NITEL/MTEL to convince some banks to mobilise loans to enable it move the company forward, have proved abortive.

It was learnt that even the argument that the prime prop­erties of the defunct NITEL spread across the country and abroad are enough guarantee to secure enough funds to reposi­tion the company so that it can compete favourably with oth­er operators did not sway the banks approached. An insider in one of the banks approached for loans told The AUTHORITY that “the prevail­ing economic circumstances in the country, especially as they af­fect the banks, are enough to scare them from taking such huge loan risks.” An official of NATCOM also affirmed that plans to hit the Ni­gerian telecommunications space with new branded NITEL/MTEL soon have gone awry.

He said: “I can tell you that it is not well with us at all as plans to resurrect the moribund NITEL/MTEL perhaps with a new brand name are not working as all the banks approached have refused to provide the needed funds, in spite of good prospects of the busi­ness and several prime proper­ties owned by the company which would have been enough guaran­tee under normal circumstances.”

The source disclosed that even the consortium of banks led by Skye Bank Plc that financed the acquisition “is not in a position to render further help in this regard because things are tight for every­body, especially the banks.” He hinted that the Federal Government is quietly investigat­ing the sales. According to him, “We under­stand that the Federal Government is probing the sale quietly to avoid scaring away other investors but they believe that the amount paid is very low as according to them, the company is worth $500 million instead of the price NATCOM paid without taking into consideration that the company has a lot of assets and some liabilities.”

He said that the only solution left for the new buyers is to seek for foreign partners who may bring in fresh funds and technical expertise to enable the company take off in a big way. Another problem facing the company, The eye witness fur­ther learnt, is the issue of liquida­tion which was part of the sale strategy. Last week, some creditors pro­tested that their money had not been paid to them almost two years after acquisition.

They recently dragged the appointed liquidator of NITEL/MTEL, Otunba Olutola Senbore, before the Financial Reporting Council of Nigeria (FRC) and the Presidential Advisory Committee Against Corruption (PACAC). In a petition signed by a repre­sentative of the creditors, Mr. Se­bagen Henry Noboh, and dated October 20, 2016, the complain­ants decried what they considered a lack of accountability in the pay­ment of their claims. According to them, the liqui­dator had paid only 16.5 percent of the amount stated in the offer let­ters to the creditors, leaving a bal­ance of 83.5 unaccounted for. The offer letters, dated May 12, 2015, were personally signed by the liquidator. They added that the 16.5 per­cent was paid to them in two instal­ments of 15 per cent in May 2015 and 1.5 percent in July 2016, an in­terval of 14 months.

Also at stake is the N51.648 billion proceeds from the sale of the core assets of NITEL/MTEL to NATCOM Consortium for $252.25 million by the last admin­istration. The consortium had fully paid up since March 2015, but the cred­itors are still struggling to get their money from the liquidator, more than 18 months after he received the money. The liquidator had fixed the amounts payable to each of the about 300 creditors based on avail­able funds, in line with the provi­sions of the Companies and Allied Matters Act (CAMA) 1990.

One of the issues raised was the decision of the Liquidator to be paying them piecemeal, stating that it was in clear violation of pro­visions of the CAMA Act. They expressed fears about the safety of the funds and the proba­bility of the liquidator releasing the 83.5 percent balance without inter­vention from the relevant monitor­ing agencies. Also affected are the various consultants to the creditors whose cheques the liquidator has alleged­ly refused to release, despite legally contracted agreement documents said to be in his possession.

The petition added, “We ur­gently seek the intervention of the FRC for independent examination of the Liquidator’s account records, because he has remained evasive since July.” In August last year, a few months into the administration of President Buhari, he ordered the Ministry of Communications to provide him all the details on the sale of NITEL/MTEL.

“The President was also con­cerned about the liquidation of NI­TEL. He is not opposed to its pri­vatisation but he wants to know how the transaction was done to be sure it was handled proper­ly. He wants a memo on how the whole transaction was undertak­en to know whether Nigeria was short-changed,” the then Perma­nent Secretary, Ministry of Com­munication, Tunji Olaopa, said, af­ter a meeting with the President in August last year. The privatization of NITEL and MTEL was completed in De­cember 2014 after the financial bid was opened in October by the ad­ministration of former President Goodluck Jonathan.

Before the acquisition, four previous efforts to sell the com­pany failed. The first was in 2001 when former President Olusegun Obasanjo sold 51 per cent equity to Investor International of London limited (IILL) as the strategic core investor. This later failed. Another attempt in 2005 to enter into a management contract with Pentascope of The Neth­erlands failed. Then the bid by Transcorp through a negotiated sale strategy was cancelled in 2009. In 2011 an attempt to hand over the company to New Genera­tion Communications Limited and Omen International also failed. The final one, which eventually succeeded, was the guided liquida­tion strategy for the sale of the com­pany which the National Council on Privatisation (NCP), led by the former Vice President Namadi Sambo, undertook. It resulted to the acquisition by the investment vehicle, NATCOM Telecommunications.

Source: AUTHORITY