Transcorp, Dead or Alive?

[hispy99]

NITEL/Mtel Gets New Investor By Feb 2009
•Privatisation of PPMC to be given priority
From Juliana Taiwo in Abuja, 09.23.2008

The Federal Government has fixed next February as the handover date of ailing NITEL/ Mtel to a new private investor.

Another key enterprise whose privatisation is to be given priority is the Pipeline and Products Marketing Company (PPMC).

Speaking through the National Council on Privati-sation (NCP), government said yesterday that it had fixed February 6, 2009 as the handover date of NITEL/Mtel to a new private owner, having scaled down the time-frame from an initial seven-month period earlier approved for the financial advisors.

These were highlights of the decisions reached at the 55th meeting of the NCP at the Presidential Villa, chaired by Vice-President Good-luck Jonathan.
Addressing State House correspondents, the Minister of State for Information, Ibrahim Nakade, said Council also listed for sale the 30 per cent stake of the federal government in NICON Insurance, which has its majority shares of 70 per cent already in the hands of entrepreneur, Mr. Jimoh Ibrahim.

According to a workplan on NITEL/Mtel approved by the NCP for the Bureau of Public Enterprises (BPE), management presentations and finalisation of transaction documents of bidders will be concluded by December 22 this year, while preparation and submission of technical and financial bids with payment of 50 per cent of bid amount will be done by January 15 next year.
Evaluation of technical proposals is slated to end by January 20 and these are to be approved by the technical committee of the NCP on 21st of January.

The opening of financial bids is scheduled for January 27, 2009, while the approval of the financial offers by NCP is to be done by February 2nd. With this, the owners of NITEL/Mtel will emerge.

The process will end between the 3rd and 6th of February 2009 when negotiation and signing of the Share Sales Purchase Agreement (SSPA) would be done between the new buyers and the federal government after payment of the full financial bid.

Nakade also said the NCP had approved eight national game parks in the country which are to be equally privatised. These are Kainji Lake, Old Oyo, Gashaka-Gumti, Chad Basin, Cross River, Kamuku, Okomu and Yankari.

A National Park’s Steering Committee chaired by the Minister of Environment, Halima Alao, is to be constituted to assist the NCP develop a policy for protection, conservation and ecotourism in national parks.
Also constituted is the inter-departmental and inter-disciplinary Steering Committee for the River Basic Development Authorities (RBDAs).

The committee chaired by the Minister of Water Resources, has the following membership: Minister of Agriculture and Rural Development, Permanent Secretary Ministry of Agriculture and Rural Development, DG, Integrated Water Resources Management Agency, Director, National Water Resources Institute, Kaduna, Chairman Technical Committee of the NCP, DG, BPE, Managing Directors of six River Basin Development Authorities chosen on the basis of the geo-political zones, representative of the private sector, representative of Water User Associations and Director of the Department of Commercialisation in BPE

The committee is to initiate the reform of the water resources sector with a view to developing a system of water and management of international standard and to equitably meet the need of water users. Such system should provide room for the private sector to participate.
Their terms of reference are as follows: finalise the National Resources bill and ensure its passage by the National Assembly, review and update policies on National Water Resources Management and National irrigation.

[hispy99]

NITEL's Worth Yet Un-researched, Documented, Says Ige
By Aaron Ukodie ,Deputy Business Editor

Former Communications Minister and Commissioner of the Nigerian Communications Commission (NCC), Olawale Ige, has said that a proper research and documentation of the assets and worth of NITEL have not been carried out to attract the right investor and technical manager that it deserves.

Ige, who was a pupil engineer in the old Post and Telecommunication (P&T) before its merger with Nigerian External (NET) to former NITEL in 1985, said that NITEL's assets buried in ducts running under the belly of the country and poles lining its skies are massive and if found and revitalized, can still make the carrier the supreme operator in Nigeria's telecom industry.

Ige, who spoke to Daily Independent in the wake of new interests being shown in NITEL should know, because for over 10 years, he was Special Adviser, Director-General and Minister at the Ministry of Communications where he was actively involved in the affairs of NITEL. He has been a Commissioner at NCC since 2000.

" NITEL can still be the biggest telecommunications company in the nation...What I am sure of is that if a proper tender document is written on NITEL; if a prosper specification on NITEL is given out and all that NITEL is made of is properly documented, it will be attractive to the big communication companies in the world and they will not hesitate to come and give it a pride of place that it deserves in this nation, because many nations are becoming saturated with telecom infrastructure", he says.

According to him Nigeria is about the only country left that still need to beef up its telecom infrastructure and because of the historical trend of NITEL "I do not see any one coming externally to defeat NITEL in its own house and it can still be as BT in the UK and the A&T in the US.

"Despite the divestiture in the UK and US, BT and A&T are still supreme. BT with all its competition is still supreme in UK. NITEL has the capacity, the resilience to be supreme in Nigeria if placed under the right management", Ige insists.

He said NITEL has facility in places that can be developed, refurbished, taken care of that will discourage those building new facilities from building, if those locations are taken care of and offered to them as lease.

According to him, new entrants are not happy building the infrastructure they are currently engaged in, instead they would rather be involved in building customer services locations; they are looking for billing locations, other locations where they can have a one-on-one with their customers.

"There are many facilities that NITEL can provide; and those infrastructure that it still has buried underground can be used to it's advantage, because in some areas they are not asking for right of way again. They already have it. Let the right publication be done about the assets of NITEL. I believe that after the right research is done and documentation made, the right investor will come", according to Ige.

Ige believes the Bureau for Public Enterprise (BPE) has not done what it should to help the case of NITEL because it has not done a proper study "and NITEL study is not a study of one or two years; and a proper specification was brought up to the world at large, which of course investors all over the world will come and authenticate that those things are there if at all they are there, I believe that we would have been able to get the BTs of this world, the AT&Ts of this world and the Deutche Telkom of this world to bid for NITEL, because those are the people, the experienced organizations that I think will know the worth of NITEL and will be prepared to run it as efficiently as possible within limits of their own capability.

"Don't forget that NITEL inherited a lot of things from P&T. The old P&T had a lot of real estate all over the nation. Telecoms began with the development of the railway lines by putting poles along the rail-lines for telegraphy to run railways and that is in the late 19th Century and ever since the colonial plans had been that anywhere a post office was built there would be some land reserved for the development of telecoms.

" If one was to think of only the old very high frequency routes, with all its repeater stations all over Nigeria, from Calabar to Lokoja to the Northern part of the country, even after the amalgamation of the North and the South in 1914; the ultra high frequency routes, all over, abandoned repeater stations, the Microwave routes, the towers that have been built in those days, since the inception of telecoms in Nigeria; the massive infrastructure that are there.

"It will not be a problem for any organization if these things are documented. If we research into the archives, the Ministries of Works, Land and Survey, going back into the colonial era have all these things to identify.

"It will not be difficult for any of the big telecom companies in the world to be attracted to invest in this enterprise, replacing all the obsolete equipment in the land with the most modern state of their technology, because there is enough on the ground to support their investment, from where they could also recoup there investment.

"So, I think that even today there are abandoned exchanges, transmitting stations, poles and towers littering the country, which the new comer to the industry will have been renting from NITEL, which NITEL should have been leasing out

"There are ducts holes in Lagos, in many cities of the country where we have conventional telecom system, where we used to pull in big copper wires, multi-way ducts that can now carry many fibre optic cables in each duct, which NITEL can lease out to new comers in the field, in modern times which are now laying optic fibre all over the place", he said.

Ige said the BPE was wrong in stopping NITEL from embarking on a $1 billion national transmission and network expansion programme in 2000 which would have help the industry and put the national carrier in its right place in the industry today.

According to him if NITEL had enough infrastructures on ground NCC would not have been justified to license incoming operators to provide their own backbone they too will not like to invest for something that is already on the ground that they can lease from

[hispy99]

Prospector, Russia's Altimo, Mirred In Dispute In Europe
By Aaron Ukodie, Deputy Business Editor

Russian telecom operator, Altimo, which at the weekend expressed interest to buy 51 per cent stake in NITEL/MTEL in the government's new bid to get a new core investor for the company is currently steeped in various transaction disputes in Europe.

Russia's Altimo is reported to be interested in taking a stake in Nigerian operator, M-Tel/NITEL. Altimo's Chief Executive Officer, Mr. Alexey Kousmichoff, was in Nigeria last week and had talks with Nigeria's Vice-President, Goodluck Jonathan. At the meeting, the Vice President assured Nigerians of Federal Government's determination to ensure that the interest of Nigerians is protected in the privatisation of M-tel/NITEL

The government and Transcorp in February 2008 agreed to bring in a new core investor into both companies, with a 51 per cent stake. Under the new arrangement, Transcorp will shed 29 per cent of the 51 per cent it is currently holding in NITEL and M-Tel, while the government will shed 22 per cent of the 49 per cent holding.

The new core investor, according to the government, will have the required technical, managerial and financial resources to take over the management of the two companies from Transcorp.

But Daily Independent investigation has shown that Altimo along with its parent company Alfa Group is currently involved in a number of disputes with several telecom operators, involving disputed shares in other telecoms companies.

This includes the ongoing battle with the Norwegian telco Telenor regarding the control over Vimpelcom and Kyivstar, and also the struggle against the Finnish/Swedish telco TeliaSonera over the control of the Turkish mobile company Turkcell.

The four-year quarrel with Alfa Group's telecoms arm, Altimo, took a bizarre turn last week when a court in Russia ordered Telenor to pay $2.8 Billion in damages ruling that it had stalled Vimpelcoms $230 million deal to buy a Ukrainian mobile operator. Telenor said it would appeal.

In addition to Vympelcom, Telenor and Mikhail Fridman's Alfa Group jointly own a Ukraine's biggest mobile operator Kievstar which has been at the heart of the dispute.

A part of the Alfa Group Consortium (AGC), Altimo was created in 2005 to represent AGC's telecom asset portfolio. Established in 1989, AGC has become one of the largest Russian privately-owned business groups which own assets in several industry sectors, including oil production, financial services, retail and telecom.

AGC's major asset is a joint venture with British Petroleum; TNK-BP. Altimo's telecom companies provide services to more than 120 million subscribers. Altimo controls the following companies: Russia's Number 2 mobile operator - VimpelCom; Russia's No 3 mobile operator - MegaFon; major Ukrainian mobile operator -- Kyiv Star; major Turkish mobile operator - Turkcell; and Golden Telecom - one of the largest fixed telecom operators in Russia.

Alfa Group's purchased LV Finance, which owned 25 per cent shares of Megafon in 2004. Market analysts considered this transaction, which valued estimated USD180-200 million, as an aggressive acquisition against Telecominvest, Petersburg-based telecom holding.

The Nigerian government recently retained BNP Paribas to act as adviser for the privatization of Nigerian Telecommunications (NITEL) and its mobile subsidiary, M-Tel

In 2006, Transnational Corp. of Nigeria paid $500 million to acquire 51% in both companies, while the government held the remaining 49%. However, Transcorp was unable to properly fund operations.

[citizen]

You guys have to know one thing. Transcorp is a government backed scam. What that means that though it has no financials and was not even eligible to be quoted on the stock exchange(no 5 year reports before quotation) it was still floated. Why Tom iseghohi is still confident and talking big is because they are not actually just losing 29% of NITEL--- They will be actually be paid cash for reducing their stake( which can settle half of their current debts ) plus they still have 20% + stake in an obviously undervalued company. In case you gus do not know most of all the GSM companies still use NITEL switches(+ SAT3 ). NITEL actually makes money but as a classical govt. company it is not paid for it's services. Except for Glo laying an alternative Sat-3 cable and the excess cash of the Arabs( Zain-kuwait, Etisalat- Dubai); NITEL can still be profitable.
If you guys can remember they owed SAT-3 over 300 million dollars at a time and it was paid by a shareholder(to be refunded by Transcorp at a later date). No business man will loose such money if he does not think the company has a future. As all you guys are selling some blokes are buying huge swathes to take over the company by March next year when the sale of NITEL sails through

[hispy99]

Originally Posted by citizen

You guys have to know one thing. Transcorp is a government backed scam. What that means that though it has no financials and was not even eligible to be quoted on the stock exchange(no 5 year reports before quotation) it was still floated. Why Tom iseghohi is still confident and talking big is because they are not actually just losing 29% of NITEL--- They will be actually be paid cash for reducing their stake( which can settle half of their current debts ) plus they still have 20% + stake in an obviously undervalued company. In case you gus do not know most of all the GSM companies still use NITEL switches(+ SAT3 ). NITEL actually makes money but as a classical govt. company it is not paid for it's services. Except for Glo laying an alternative Sat-3 cable and the excess cash of the Arabs( Zain-kuwait, Etisalat- Dubai); NITEL can still be profitable.
If you guys can remember they owed SAT-3 over 300 million dollars at a time and it was paid by a shareholder(to be refunded by Transcorp at a later date). No business man will loose such money if he does not think the company has a future. As all you guys are selling some blokes are buying huge swathes to take over the company by March next year when the sale of NITEL sails through

How can they take over the company next year March when the core investor will own 51%?

[Michael]

Originally Posted by citizen

You guys have to know one thing. Transcorp is a government backed scam. What that means that though it has no financials and was not even eligible to be quoted on the stock exchange(no 5 year reports before quotation) it was still floated. Why Tom iseghohi is still confident and talking big is because they are not actually just losing 29% of NITEL--- They will be actually be paid cash for reducing their stake( which can settle half of their current debts ) plus they still have 20% + stake in an obviously undervalued company. In case you gus do not know most of all the GSM companies still use NITEL switches(+ SAT3 ). NITEL actually makes money but as a classical govt. company it is not paid for it's services. Except for Glo laying an alternative Sat-3 cable and the excess cash of the Arabs( Zain-kuwait, Etisalat- Dubai); NITEL can still be profitable.
If you guys can remember they owed SAT-3 over 300 million dollars at a time and it was paid by a shareholder(to be refunded by Transcorp at a later date). No business man will loose such money if he does not think the company has a future. As all you guys are selling some blokes are buying huge swathes to take over the company by March next year when the sale of NITEL sails through

Any Company can be a good stock if the price is low enough! The Only question now is "has the price fallen enough" and even if it has, what will stop it falling more in the current market.

[kingojames]

what will happen to our stocks when a core investor finally takes over d 51% of transcorp?When would someone like me plan to sell.i bought this stock at 2.99 and i am very heavy on it.I've been hearing rumours about changes in its position any time from Mar '09.Any analysis will help.

[iyke-d]

How can they take over the company next year March when the core investor will own 51%?

I believe he meant take over Transcorp, not NITEL. I don't agree with the premise of his argument, but it has some validity. If for whatever reason NITEL's new valuation turns out to be in the range of $2 billion or more, meaning Transcorp will receive enough cash back to payoff the NITEL loans while still retaining a 22% stake. If such a scenario happens, the NITEL deal may very well turn out to be a sweet one for Transcorp afterall. In any case, thats a big gamble and my best hope is that Transcorp evens out at the end of the day on NITEL.

Its encouraging too that the eventual sale of NITEL is being pushed to April time frame as this gives Transcorp more time to complete the ongoing transformation which hopefully will be reflected in the final valuation in the months ahead.

[kingojames]

New owners take over NITEL May 29 - BPE {TRIBUNE}

Bola Badmus and Gbola Subair, Abuja with Agency Reports - 26.09.2008

NEW owners of the Nigerian Telecommunications Limited (NITEL) will take over the company on May 29, 2009 after their name is announced in April.

Director General of the Bureau of Public Enterprises (BPE), Mrs. Irene Chigbue, disclosed this at a briefing in Abuja on Thursday.


According to her, the BPE will pick a new owner at a bidding in April while NITEL will be handed to them on May 29.


Chigbue said the time frame for concluding the sale was “quite challenging,” given the amount of work to be done.


The sale of ``NITEL is now on a fast track,'' she said. The agency plans to sell 51 per cent of the company and Mtel, its mobile-phone subsidiary, to a new investor after the failure of Transnational Corporation of Nigeria Plc (Transcorp), the former majority investor, to meet targets set by the government. Transcorp paid $500 million in 2006 for the stake.


The BPE also gave an assurance that Nigerians will not be short-changed in the privatisation of NITEL.


Mrs. Chigbue said at the ministerial press briefing that she appreciated the concerns of stakeholders and indeed all Nigerians on the issue.


Chigbue’s assurance came as Minister of Information and Communications, Mr. John Odey, disclosed that the privatisation exercise had saved for the country $10 billion, which could have been wasted on moribund enterprises.


The BPE boss said that anytime the sale of NITEL would come up, Nigeria would never be short-changed.


“The Bureau appreciates this concern and has, therefore, worked exceptionally hard to make sure that at any time, no matter when it is sold, and how many times it has gone to the market, Nigerians will never be short-changed,” she said.


She added: “And the purpose of setting up the enterprise must be met.”


Chigbue, who recalled the operation of NITEL under Transcorp Plc. as core-investor, declared that Transcorp was adjudged as a failure by the verdict of the Ministry of Finance and BPE, among other stakeholders.


“The meeting, after reviewing the performance of NITEL and Mtel under the one-year leadership of Transcorp, came to the conclusion that Transcorp had failed to achieve the targets contained in the Share Sale Purchase and Purchase Agreement (SSPA) which it had signed with government before taking control of the two companies.


“Based on the above conclusion, the meeting agreed that Transcorp should step down as core investor in NITEL and Mtel when a new core investor is selected.


“It was also agreed that the 51 per cent of NITEL shares to be given to new core-investor would be contributed by the Federal Government and Transcorp Plc.,” she said.


Chigbue, at the ministerial press briefing, disclosed that the Federal Government had approved for commercialisation, the Nigerian Television Authority (NTA), Federal Radio Corporation of Nigeria (FRCN), News Agency of Nigeria (NAN) and the Nigerian Film Corporation (NFC).
She said the exercise had been slated for between October 2008 and March 2009.


Speaking further, Minister of Information and Communication, Mr. Odey, also disclosed that the government realised N587 billion through privatisation between 2000 and 2007.


He lauded the deregulation and liberation policy going on in government companies, describing it as commendable.


The minister declared that the Federal Government would not rest on its oars to make Nigeria more secure while providing conducive business environment for foreign investors.

[hispy99]

Privatisation: PWC begins audit of NITEL accounts
By Everest Amaefule, Abuja
Published: Monday, 29 Sep 2008
Foremost accounting firm, PricewaterhouseCoopers, has been hired by the Federal Government to audit the accounts of the Nigerian Telecommunications Limited for 2006 and 2007 in order to get the firm ready for the rescheduled sale.

The accounts of the company and its mobile subsidiary, the Nigerian Mobile Telecommunications Limited, for 2005 are currently being worked on by Akintola Williams Deloite. The companies’ last audited account was for 2004.

The Director-General of the Bureau of Public Enterprises, Mrs. Irene Chigbue, who disclosed this to our correspondent, said it was imperative to get the accounts of the two companies in order before they could be privatised.

She said, “Having up-to-date financial information is critical for a successful transaction and it is hoped that NITEL/M-Tel would take the issue seriously and complete the accounts within two months.

“The strategic phase would commence on November 20, with the issuance of Request for Proposals and other documents to bidders. This phase also includes due diligence by bidders via the electronic and physical data room inspections.

“Bidders are also expected to undertake a nationwide tour of NITEL/M-Tel facilities and hold discussion with BPE, Transcorp and NITEL/M-Tel officials. This phase will end on April 13, 2009, with the approval of the technical bids of the prospective core investor by the Technical Committee and the National Council on Privatisation.”

At a press briefing addressed by Chigbue on Thursday, she had disclosed that the opening of the financial bids for the company would be conducted on April 21, 2009, while the telecoms companies would be handed over to the successful core investor on May 29, 2009.

This contradicts earlier information released by the National Council on Privatisation that the resale of the telecom companies would be concluded in February.

As a result of the inability of current core investor, Transnational Corporation, to transform NITEL, 51 per cent equity in the companies are up for sale to a new core investor that has the financial muscle to turn around the beleaguered firms.

While the Federal Government is yielding 24 per cent of its current holding, Transcorp is yielding 27 per cent of its holding to give 51 per cent majority equity to a new core investor that is expected to take over the running of the company on May 29.

[chrisekpo]

transcorp is alive and will spring up surprises wen the mkt rebounds, believe meah guys transcorp and dunlop are the two stocks which i believe will srprise investors by 1st quater of next year. the only problem is that am yet to see a raw financial data of transcorp, to be able to base my projections on. as for dunlop....
watchout guys

[hispy99]

Originally Posted by chrisekpo

transcorp is alive and will spring up surprises wen the mkt rebounds, believe meah guys transcorp and dunlop are the two stocks which i believe will srprise investors by 1st quater of next year. the only problem is that am yet to see a raw financial data of transcorp, to be able to base my projections on. as for dunlop....
watchout guys

Can you please share with us the basis of your analysis on transcorp?

[anekwlc]

Originally Posted by chrisekpo

transcorp is alive and will spring up surprises wen the mkt rebounds, believe meah guys transcorp and dunlop are the two stocks which i believe will srprise investors by 1st quater of next year. the only problem is that am yet to see a raw financial data of transcorp, to be able to base my projections on. as for dunlop....
watchout guys

Please share with us the data you have for Dunlop.