Ghana: Jospong-Expresso deal off

Mergers, Acquisitions and Financial Results

Adom Business can confirm that the Jospong Group of Companies (JGC) and Expresso Telecoms Ghana deal is off.

The two closed discussions on the sale of Expresso on Friday January 31, 2014, two clear days after ADOMBUSINESS revealed that negotiations had been ongoing between Jospong and Sudatel about the sale of Expresso, the only CDMA operator in the country.

In a letter exclusively addressed to ADOMBUSINESS, the Management of Expresso said “…we acknowledge that we have had discussions with the Jospong Group of Companies regarding the sale of Expresso. Our discussions with Jospong, however, came to a close on 31st January, 2014.”

The Managing Director of Expresso Ghana, El Amir Ahmed El Amir later told ADOMBUSINESS Jospong lost interest in the deal and pull out.

He explained that Jospong wrote to Expresso in April 2013 asking to buy Expresso.

According to El Amir, there were other interested buyers but “Jospong asked for exclusive negotiations between April 2013 and December 2013, but we closed the discussion on January 31, 2014 and I can say we do not have any more commitments toward each other.”

The Expresso MD said the other potential buyers have also not shown interest in the company again since.

A highly-placed and impeccable source at Jospong confirmed to ADOMBUSINESS that the company had discussions with Expresso for months with an interest to buy the telco, but it lost interest when the issue of conflict of interest came up.

The conflict of interest was with regards to Subah Infosolutions Limited, which is a member of the Jospong Group and it has been appointed by the Ghana Revenue Authority to audit telcos. So Jospong would have been conflicting its interest running a telco and auditing its competitors.

According to the Jospong source “we had wanted to inject some local content into the telecom industry to ensure that some of the revenue from that sector stayed in the country.”

He also confirmed that Jospong had written to Expresso and asked for exclusive negotiation because “we did not want to them to be talking to other potential buyers until we finished out discussions with them.”

Meanwhile, Expresso Ghana is losing customers consistently and the company still has interconnect debts to settle with other telcos and they are unable to pay for handsets they requested from one handset dealer.

The Jospong source said “we are fully aware of the poor performance of the company and its indebtedness but we are risk takers and we were ready to take the risk to secure local content in the telecoms industry.”