NITEL and MTEL face liquidation

Nigerian state telco, NITEL and its mobile network subsidiary MTEL, are set to become victims of a ‘guided liquidation,’ the Nigerian government has confirmed.

The National Council on Privatisation (NCP) said that it approved the liquidation in view of the huge liabilities of both companies.

At its last meeting in December 2011, the NCP had considered the presentations made by the management of NITEL and MTEL on the way forward for both companies. The NCP had directed the management of both telecom operators to submit detailed financial reports and other relevant information on the proposals for the resuscitation of both companies to the technical committee of the NCP.

The technical committee recommended that ‘guided liquidation’ should be adopted as there was no viable financial alternative presented by the management of NITEL/MTEL.

Local company, Transcorp bought a 75 per cent stake in NITEL in 2006 for US$750 million during an earlier privatisation sale, but the government reclaimed the stake in 2009 following several years of neglect.

Since that time there have been three aborted attempts to sell the company, with the last failing in June 2011 when the Omen International Consortium – which was backed by China Unicom – failed to pay a required US$105 million deposit on the sale.

The formal process for the liquidation of the company is still to be confirmed.