When I posted about Transcorp earlier this year, I said May 2007 would be a crucial month for the company. The hype about Transcorp has come and gone.
Bernard Longe is on compulsory leave due to an investigation at First Bank of Nigeria over a loan granted to NITEL whilst he was CEO. The Transcorp Board said the process was initiated in compliance with a Nigerian Stock Exchange (NSE) directive about indicted/dismissed CEO of quoted companies.
Earlier this month, Tom Iseghohi was appointed CEO, no word on Bernard Longe. Transcorp has had 2 CEOs in the last 2 years. Good luck, Tom.
It seems Transcorp managed to secure 76% of NITEL despite varying reports suggesting it only owns 51%. Last month, it was reported that BT had quit as its technical partner. Transcorp released a press release stating that first stage of the agreement with BT had simply finished and was hoping to extend it.
The company also stated it was “pursuing opportunities to bring in potential strategic investors into NITEL and M-tel”. A week later, the Independent reported that Transcorp was close to sealing a $1.2 billion deal with Vodacom. The deal would probably give Vodacom control of M-tel and a 27% stake in NITEL.
With this deal on the table, I’m still optimistic. If this deal goes through, it will inject the much needed cash into indebted company whose IPO was not well received (compared to Dangote Sugar, despite the worldwide roadsow) and will bring in Vodacom, an able partner, who has been keen to enter the Nigerian mobile telecom market for some time.
100% Nigerian. 100% World Class
Beautiful Slogan, you would agree. The slogan could become a problem if TransCorp decided to expand outside Nigeria. For now, TransCorp is 100% Nigerian, not sure 100% World Class.
A friend told me about TransCorp’s roadshow presentation at St. James Park in London and I gladly agreed to attend. Naturally I was excited about the attending my first Nigerian roadshow. I made a few observations; allow me to share them with you.
The IPO of TransCorp should be the gold standard for other companies looking to “go public”. The IPO prospectus omitted crucial information. It failed to state the any “meaningful” historical accounts for the company. After the Cadbury Nigeria incident, accounts should be detailed and thorough. The IPO prospectus should have some historical accounts for NITEL and TransCorp Hilton to give prospective investors an idea of the profitability of these businesses. Forecasts are only useful when compared with historical accounts.
At the roadshow presentation I attended, the TransCorp Executives could not confirm the number of subscribers on the M-tel network. I find that very odd. Are they suggesting they paid good money without due diligence? This report offers very little comfort to prospective shareholders suggesting subscribers in 2006 stood at 200,000 from 1.2 million in 2005.
The same report suggests 75% of NITEL was sold to TransCorp. In the IPO prospectus, TransCorp owns 51% of TransCorp Telecomms. TransCorp Telecomms owns the 75% of NITEL. So TransCorp owns half of the 75% stake? This is poor disclosure.
The roadshow presentation was not what I expected. Standing for thirty minutes and listening to someone defend Obsanjo’s Tata idea for Nigeria was not cool. The TransCorp Executives failed to communicate their ambition for the company. I’m more optimistic but let’s see what happens in May first.
I got emailed this article about Obasanjo and TransCorp. We all know OBJ oversaw the creation of Transcorp based on South Korea’s chaebols.
There is yarn* that OBJ owns $9 million TransCorp shares. TransCorp recently acquired the state telecoms giant, Nitel in a bidding process most observers believed wasn’t very transparent. That was a shame, however I don’t understand why the presidential spin doctor doesn’t know whether OBJ owns shares or not in TransCorp.
A presidential spokeswoman said she did not know if the president owned shares in the company, and the company also denied knowledge of any presidential holding.
I thought spin doctors were briefed before press conferences.
As if that wasn’t enough, I don’t understand why TransCorp doesn’t have a shareholder list.
Transcorp spokesman Adedayo Ojo said the company did not have a full list of shareholders: “No one in Transcorp can talk about what the president has or does not have.”
Is this dude kidding me? TransCorp is a private company. They intend to list on the Nigerian Stock exchange soon, at least the prospectus should detail their existing shareholders. I hope so anyway.
So “Does Nigeria really have hope”?
*yarn, slang ; talk on the street, rumour
