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Panel submits report on NITEL’s N300bn debt

By on January 15, 2015

The committee verifying the N300bn debt reportedly incurred by the Nigerian Telecommunications Limited before it became moribund has submitted its interim report to the Bureau of Public Enterprises.

Investigation by our correspondent showed that the committee, which is based in Lagos, was in Abuja last week and submitted an interim report before returning to Lagos.

The Head of Public Communications, BPE, Mr. Chigbo Anichebe, confirmed that creditors to NITEL and its mobile subsidiary, the Nigerian Mobile Telecommunications Limited, had submitted claims of about N300bn.

The verification exercise became necessary because the creditors will share the $252.52m (about N45bn) proceeds from the sale of NITEL and M-Tel, which is much lower than the total indebtedness of the beleaguered telecommunications companies.

The prospective core investor in the companies, NATCOM Consortium, had last week paid $75.76m, representing 30 per cent of the $252m it had bid to for the two firms.

Anichebe had said that the creditors would have to wait for the full proceeds to come in before they could be paid any money.

Our correspondent learnt that the creditors needed to wait because the verification exercise had not been concluded.

The creditors of the telecommunication firms form a significant percentage of the membership of the committee of inspection appointed by the court to work with the liquidator. They have been representing the interest of the creditors in the transaction process.

The verification committee, which is mainly composed of consultants, is not only expected to verify the debts but is also to come up with the formula for sharing the proceeds among the creditors.

The National Council on Privatisation chaired by Vice-President Namadi Sambo had at its meeting of February 27, 2012 approved the privatisation of NITEL and M-Tel through guided liquidation.

The strategy was adopted by the NCP after consideration of other options and in the light of the previous failed attempts to privatise both firms through the strategic core investor sale and negotiated sale strategies, and the huge liabilities of creditors to the tune of over N300bn.