Stories by Peter Egwuatu
TRANSNATIONAL Corporation of Nigeria (Transcorp) Plc has blamed the Federal Government for its inability to meet up with its debt obligation with its bankers.
According to a statement by the company, it blamed â€œcontinued political undertonesâ€™ from its co-owner, the Federal Government, for its inability to take charge of its purchase until June 2008, two years later. â€œThis situation meant that Transcorp could not generate income needed to offset the outstanding liabilities; neither could it take bold decisions necessary to put the company on a sound financial footingâ€ the statement noted.The Transcorp statement affirmed the health and well being of the company and noted that N1TEL/MTEL are â€œthe only laggards in the portfolio of Transcorp.
â€œThis situation meant that Transcorp could not generate income needed to offset the outstanding liabilities; neither could it take bold decisions necessary to put the company on a sound financial footingâ€the statement added. Reports inÂ newspapers have tended to lump the Transcorp chairman with the five banksâ€™ managing directors the Central Bank of Nigeria (CBN) sacked for the precarious financial position of their banks.
Transcorp also noted in its statement that representatives of the banks from which it borrowed money also sit on Transcorpâ€™s board and are keeping an eagle eye over their loans. The outstanding loan had apparently ballooned because of accumulatedinterest charges.Transcorp , one of the firms listed as owing banks debts in billions of Naira, has decried attempts to personalize the loan by direct linkage to its Chairman, Prof Ndi Okereke-Onyuike.Transcorp, in a statement made available to Vanguard stated that the CBNâ€™sÂ publication of the list of debtors, was wrong to ascribe the loan to Prof Okereke-Onyuike.
â€˜Tor the avoidance of doubtâ€, it stated, â€œProf Okereke-Onyuike serves as non-executive Chairman of Transcorp on a national assignment by the Federal Government and with the approval of her employers, The Council of the NigerianStock Exchange.Transcorp averred in its statement that while it is true that the firm borrowed money from the banks to purchase NITEL, it had repaid a substantial part of the loan from the proceeds of its Initial Public Offering (IPO) made to raise money.
It stated: â€œThe loan was partly repaid from the proceeds of IPO ; N22billion was raised from the IPO out of which Transcorp paid N19billion to the banks that financed the NITEL/MTEL acquisition, N2billion went straight for resuscitation of NITEL/MTEL operations and Nlbillion was retained for monthly servicing of the loan.
Transcorp said in the statement thatÂ it is â€œcommitted to best practice in banker-customer relationships as evident in it s previous loan repayment, and would continue to do so given an enabling environment. â€œ
The management of Transcorp recounted that the loan issue arose from its response to a Federal Government call in 1995 for â€œNigerian companies to save the country from the embarrassing $257million bid from Orascom of Egyptâ€ for a 51% stake in NITEL.
Transcorp won a negotiated bid and paid US$500m for the firm. It raised the money as a loan from a consortium of banks that included Zenith, UBA, Intercontinental, Oceanic, First Bank and Union Bank. The Federal Government retained 49% of the equity of the firm.
Transcorp asserted that the US$500million loan was â€œpartly repaid from the proceeds of Transcorpâ€™s Initial Public Offering (IPO); N22billion was raised from the IPO out of which Transcorp paid N19billion to the banks that financed the NITEL/MTEL acquisition, N2billion went straight to resuscitation of NITEL/MTEL operations and Nlbillion was obtained for monthly servicing of the loan.â€