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Transcorp, Etisalat part ways


November 06, 2006/punch




The alliance between Transnational Corporation and Etisalat of Abu Dhabi, United Arab Emirates for the acquisition of majority stake in the Nigerian Telecommunications Limited has finally collapsed.

Some sources told our correspondent that Etisalat pulled out of the consortium because of inappropriate and loosely defined terms of relationship between the two companies.

The Director-General, Bureau of Public Enterprises (BPE), Mrs. Irene Chigbue, had while announcing Transcorp, the preferred bidder for 75 per cent equity in NITEL, disclosed that Transcorp and Etisalat had formed a consortium for the acquisition of NITEL.

She also said that the bid submitted by Transcorp showed that Transcorp had entered into an agreement with the British Telecom for the management of NITEL after acquisition.

According to her, BT would not acquire any stake in NITEL while Etisalat had an equity stake agreement with Transcorp. She, however, failed to disclose the equity ratio between Transcorp and Etisalat.

Before both companies decided to form a consortium, the Abu Dhabi company had been listed by BPE as one of the eight firms that made the preferred list for core investor position in NITEL.

Apart from Transcorp, others that made the short list included Globacom Nigeria Limited; Telkom of South Africa; Afro Telecommunications Limited of Nigeria/Korean Telecom and MTC of Kuwait/Celtel International of Netherlands Consortium.

Investcom of United Arab Emirate and a late entrant, Lucent Technologies of United States also made the short list. This was before MTC/Celtel withdrew from the race on the account of acquisition of 65 per stake in the former Vmobile.

Sources said Transcorp and Etisalat entered into a consortium for NITEL acquisition so that both companies could harness their strengths.

While Transcorp was bringing to the table its verse knowledge of the Nigerian environment as well as the contacts of its directors, Etisalat was to contribute financially from its deep pockets.

However, this could not happen as Etisalat developed cold feet when the transaction was stressed and the signing of Share Purchase Agreement between Transcorp and BPE was prolonged.

There had been speculations that since Etisalat had withdrawn from the consortium, Transcorp might settle for 51 per cent equity, which the $500m it had paid for covered instead of paying additional money to make up for the 75 per cent that BPE negotiated with it.

But Transcorp’s Vice-President, Corporate Affairs, Mr. Adedayo Ojo, told our correspondent that Transcorp would not settle for 51 per cent. He said the company would complete the payment and maintain a 75 per cent equity in the first national carrier.

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