The Bureau for Public Enterprises (BPE) has secured a court confirmation for the appointment of a guided liquidator for the privatisation of former state-run but now moribund power company, the Nigeria Telecommunications Limited (NITEL) and its mobile arm, MTel, Director General of the privatising agency, Benjamin Dikki, has said.
He recalled that the National Council on Privatisation (NCP) had approved the appointment of a liquidator for the guided liquidation of NITEL/MTEL pending court confirmation.
Dikki assured that the privatisation process was on course, adding that it will be followed through by the agency.
He said: “The process is continuing and the prospective bidders are currently conducting Data Room due diligence on the assets. Prior to the data room exercise, a pre-bidders’ conference was held to adequately brief and provide the bidders with all the necessary documentation for the exercise.”
NITEL office, Abuja
There have been about three futile attempts at selling the public telcos with analysts wondering if the telco was jinxed.
Dikki had said though the telco has lost its relevance in the scheme of things with the liberalisation of the telecoms sector, government still owes it a duty to the people that the telco is not sold as scrap.
Its Director General, Benjamin Dikki who spoke in an interview with The Nation, said it is opting for guided liquidation because it has worked in the privatisation of the Nigeria Fertiliser Company was (NAFCOM) operating as Notore. It was also used in Jebba Paper Mill and Savannah Sugar and these firms are flourishing.
He had said: “With the reforms and with the liberalisation of the sector, nobody remembers that there was a Nitel. We are not missing Nitel because the sector has been liberalised and competition has been introduced and there are players who are playing in the telecom sector.
“Number two, the issue of mode of privatisation of Nitel is purely a legal matter. Nitel is owing over N400million in debts. If this company is to be run by government as some people have suggested, it means that government has to cough out money to resolve those liabilities. Why should government put down money to revive Nitel when Nitel is no longer a critical infrastructure in the Nigerian economy? If Nitel doesn’t come up again at all, Nigerians will still survive in terms of access to telecommunications. So, Nitel has ceased to be a critical asset. So government looked at all the options.
“What are the benefits of putting money, the option of public private partnership (PPP), and other options resuscitating Nitel but all of them have investment implications for the government. Telecom is not a priority area for government now. It is better taken care of by the private sector. We now decided to take advantage of the Company and Allied Matters Act. What the Americans call Chapter 11. You go and file for the liquidation of Nitel. We didn’t want it to be liquidation, the typical liquidation style, where you sell one building, one cable to different parties. We call it guided liquidation because we want whoever buys Nitel and Mtel to still continue to run the telecom and not to extinguish Nitel from business.
“Guided liquidation means that we take protection from the law that it is only the sales of the proceeds of the assets creditors can have access to. After that they cannot have a recourse to government and shareholders or any shareholder in it. That is why we say guided liquidation. We still maintain Nitel as a business way. We will not decimate its assets. Whoever buys Nitel will give us a technical proposal on how he is going to resuscitate Nitel and run it as a telecoms company. I want to assure you that Nitel still has the potential to run a broad band capability in this country because it has a fibre optic range round the country and in many of the major cities it has right of ways for cabling into the houses. So that is the rationale of taking this mode of privatization to limit government’s exposure to settling the liabilities that government has incurred over the years.”
Source: BizTech Africa