The Debt Management Office may not raise the N54bn which the Federal Government asked it to raise for the settlement of the salaries and other liabilities of the Nigerian Telecommunications Limited.
Investigation by our correspondent showed that NITEL and its mobile subsidiary lack the capacity to fulfill the conditions which the management of DMO has asked for before it can raise the money through issuance of FGN bonds.
One of the biggest conditions which the beleaguered telecommunications company has found difficult to meet is the request for Irrevocable Standing Payment Order from the company.
ISPO is an instruction issued by an organisation to its bankers or other sources of finance to pay a certain amount of money to a creditor on regular basis. It presents a plan for liquidating a debt and the accruing interest.
Our correspondent learnt that since NITEL had been financially incapacitated and is slated for sale, it is not in a position to issue any ISPO except the Federal Government or any of its agencies issues such an order.
It was also learnt that DMO‘s insistence on ISPO emanates from the fact that nobody is servicing the bonds that the debt agency had raised on behalf of the Federal Government to settle the $500m Transnational Corporation had invested in 2006 for 50 per cent equity in NITEL.
DMO had been using money from other sources to pay for the interest accruing on the Transcorp bond and does not want to get trapped again by issuing a bond to bail out NITEL without any guarantee for liquidating the accruing interest.
President Goodluck Jonathan had about three weeks ago approved that DMO should raise about N54bn to settle the liabilities of NITEL to its workers.
A total of 3197 casual workers who were laid off from the service of NITEL in 2006 are scheduled to get N3.28bn from the fund.
The cost of settling outstanding salaries and disengagement entitlements of current NITEL staff is put at N24.71bn while that of M-Tel is N4.76bn, summing up to N29.47bn.
Source:http://www.punchng.com/Articl.aspx?theartic=Art201011074244960
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