Succour is far-fetched for cash-strapped Nigerian Telecommunications Limited (NITEL), as the Bureau of Public Enterprises (BPE) has stopped the firm from drawing from a N14 billion loan facility it signed four weeks ago with a consortium of banks. That effectively threw spanners in plans by the management of the company to implement the Business Plan approved by the Board of Directors in September, last year. The agreement for the N14 Billion loan facility was signed October 8 in Abuja between NITEL and a consortium of eight banks led by Afribank Nigeria Plc. Other banks involved in the deal are Chartered Bank Plc, Union Bank of Nigeria Plc, First Bank of Nigeria Plc, Guaranty Bank Plc, Access Bank Nigeria Plc and Citibank. Scarcely had the company's management settled down to draw from the facility than it received a letter from the BPE warning it not to draw from the facility. The Bureau's main point was that since NITEL was going to be privatized, it should not engage in any capital project. The letter signed by the Director-General of the Bureau, Dr. Julius Bala dated October 11, 2004 and titled "14 Billion Credit Facility for NITEL" stated in part: "We wish to draw your attention to the National Council on Privatisation (NCP) policy on the implementation of substantial new capital investment and expansion by enterprises slated for imminent privatization. "The NCP considers that certain actions by the management of an enterprise to be privatized may result in the depletion of shareholders value or make the enterprise unattractive for sale. Thus, to protect the interests of stakeholders, the NCP stipulates fiscal discipline and sound management principles during the pre-privatisation period." The BPE's letter then added: "In line with NCP guidelines on implementation of the privatization programme, you are hereby requested to immediately suspend the disbursement and or utilization of this credit facility, pending when the NCP's specific directive is sought on the matter." When THISDAY spoke with Bala yesterday, he confirmed the existence of the letter but denied that NITEL had been stopped from drawing from the fund. According to him, what was requested from NITEL was for the company to seek approval from the NCP before using the facility. He said: "They have not been stopped, they are going through the process of seeking approval from the NCP." When pressed further whether the company would be able to draw from the funds once the approval is granted and if approval is refused, whether that marked the end of the matter, Bala said: "Enterprises who present a very good case normally get such approvals. I don't see any problem in that." Bala further stated that he did not want to start to speculate on anything, but that it is better to wait and see how the process of getting the approval turns out. BPE Director-General, Dr. Julius Bala and Ms. Irene Chigbue, a director with the Bureau, are currently members of the NITEL's Board of Directors which approved the Business Plan and the proposal to source for funds from the capital market for the implementation of NITEL's projects. When contacted, NITEL's Deputy General Manager, Corporate Communications, Mr. Tayo Ekundayo said he would not want to comment on the matter. He further said the directive of the NITEL Board is that NITEL does not join issues with anyone on the matter. One of the projects that would suffer from the stalemate over the loan is the 250,000 digital lines planned for Lagos since four years ago, and which contract was approved by the Federal Executive Council at the inception of the new board headed by Engr. Vincent Maduka. Also, the planned launch of fixed wireless lines by the national operator has been effectively put on hold. At the signing of the agreement in Abuja on October 8, the Deputy General Manager, Corporate Banking, Afribank Mr. Chinedu Onyia, who represented the bank at the signing ceremony said the funds coming to NITEL are designed to provide advance payment to add to vendor financing, to kick-start NITEL's 250,000 lines expansion in Lagos. Onyia also stated that the telecommunications sector is one of the fastest growing sectors of the economy and NITEL is one of the top players. According to him, the consortium has absolute confidence in the performance of NITEL. At the inception of the Engr. Vincent Maduka-led NITEL board, the board approved the Business Plan of the company drawn up by the Pentascope management. The plan was based on the pillar that NITEL, like other telecom firms in the country would go to the capital market to source for fund to plan its expansion project. It had then started the process of negotiating the loan with interested banks. The culmination of its efforts was the signing of the agreement four weeks ago.
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