NT revives stalled move to find strategic partnerNepal Telecom (NT) has revived its stalled move to find a strategic partner and plans to sign an agreement with a consultant who will scout for potential candidates.
Nepal Telecom (NT) has revived its stalled move to find a strategic partner and plans to sign an agreement with a consultant who will scout for potential candidates.
In March 2014, the state-owned telecom giant had shortlisted Analysys Mason Limited India, a subsidiary of UK-based Analysys Mason, as a consultant to help it lay the groundwork to choose a strategic partner.
But before NT could sign an agreement with the company, the Commission for the Investigation of Abuse of Authority (CIAA) launched an investigation into the
selection process on suspicion of graft.
The anti-corruption watchdog recently gave NT the green signal to resume the process of hiring a consultant. The CIAA pulled back following the suspension of its chief Lokman Singh Karki after an impeachment motion was filed against him in Parliament.
The CIAA’s decision to give NT the go-ahead soon after Karki’s suspension has raised suspicions whether the suspended chief had been deliberately trying to delay the process.
“Since the CIAA has given us the all-clear, we have invited Analysys Mason to sign the contract,” NT Spokesperson Pratibha Vaidya told the Post. The Indian company was informed this week. “We have asked it to come and sign the agreement within 15 days,” she said. “The deal may be sealed as early as next week.”
NT has been trying to find a strategic partner for the past five years in a bid to enhance its competitiveness and efficiency. Analysts have said that NT may meet the fate of other loss-making state-owned firms, or turn into a white elephant, if the government fails to bring in a strategic partner.
The government owns 91.49 percent of the behemoth. Its employees and the general public hold 8.48 percent of the shares, and state-owned Citizen Investment Trust has a 0.03 percent stake in the company.
The government has reportedly planned to divest its stake and bring its share-holdings down to 60 percent. If this happens, a prospective partner will have to invest Rs30-40 billion, according to a study conducted by the Ministry of Finance in 2012.
Spokesperson Vaidya said that a final decision on the proposed divestment would be made after the consultant completes its study. The consultant is also expected to conduct a due diligence audit of NT which will give a complete picture of its financial health.
NT has a paid-up capital of Rs15 billion and reserves and surpluses of Rs74.5 billion. It posted a net profit of Rs4.1 billion in the first quarter ended mid-October.