BPE Yet To Repay N112bn Loan Incurred On NITEL Transaction, Investigation Reveals
The Bureau of Public Enterprises has yet to redeem a total of N112bn it incurred in the process of selling Nigeria’s legacy telecommunications operator, the defunct Nigerian Telecommunications Limited, investigation has shown.
The Debt Management Office had on two occasions issued bonds to enable the BPE to wriggle out of financial straits occasioned by the process of selling the defunct telecommunications monopoly.
The first tranche of the loan was N63bn used to settle a former core investor in NITEL and its mobile subsidiary, the Nigerian Mobile Telecommunications Limited — Transnational Corporation — after its investment in NITEL was terminated by the government of the late President Umar Yar’Adua.
The second tranche of the loan was N54.55bn raised on behalf of the BPE by the DMO for the settlement of the terminal benefits of workers of the defunct telecommunications company whose pensions were bought by the Federal Government.
DMO confirmed in a report obtained by our correspondent that only N2.55bn had been redeemed from the first tranche of the loan, leaving an outstanding of N60.48bn.
Similarly, of the second tranche of the loan, only N2.55bn had been redeemed, leaving an outstanding of N52.002bn.
This means that the privatisation agency, which signed a Memorandum of Understanding with a DMO for the loans like other governments Ministries, Departments and Agencies, still have an outstanding of N112.48bn to repay.
The United Bank for Africa Plc had led a consortium of five banks that financed the acquisition of NITEL and its mobile subsidiary, the Nigerian Mobile Telecommunications Limited by Transcorp Plc in July 2006, although it took over the management of the company in November 2006.
The National Council on Privatisation, chaired by then Vice-President, Goodluck Jonathan, rose from its meeting on June 1, 2009, and announced the revocation of the sale of NITEL to Transcorp Plc.
According to the Federal Government, the revocation of the sale followed the failure of Transcorp to fulfil the conditions specified in the agreement ceding 51 per cent equity to the company in 2006.
Some of the conditions that Transcorp could not fulfil included the failure to retain a technical operator after the British Telecom vacated the job four months after the deal and the inability of Transcorp to inject a capital of N8.9bn within 100 days of acquisition.
The late President Yar’Adua had directed the BPE to enter into negotiation with the banks that financed the acquisition of NITEL by Transcorp to ensure that the cancellation of the transaction had a human face.
This led to the issuance of bond by the BPE in order to refund the money that had been paid for the acquisition of the telecommunications company.
On the other hand, the Federal Government had initially paid NITEL workers numbering about 17,000 about N53bn as pension buy-out.
However, following a petition by workers of the defunct company, the pension buy-out was raised by another N20bn, implying that the money that was realised from the initial sale of the company was not enough to settle the workers.
This necessitated the issuance of another bond to settle the liabilities of workers’ emolument.
NITEL was eventually sold to NATCOM Consortium, which put in a bid of $252.25m at the financial bid opening held on December 3, 2014.