Lap GreenN eyes Orange Uganda

Mergers, Acquisitions and Financial Results

A subsidiary of Libya’s sovereign wealth fund, Lap GreenN, is said to be interested in bidding for Orange Uganda, which owner Orange has hired Lazard to assess strategic option for, sources told TMT Finance.

Lap GreenN, which already owns a majority stake (69%) in Uganda’s fourth largest mobile telecom operator, Uganda Telecom’s UT Mobile, is tipped to be preparing to bid for its smaller rival Orange Uganda, which is likely to fetch upwards of US$50m, sources said.

Such a deal would see consolidation strike twice in quick succession in Uganda, where the operators have struggled due to low ARPUs, resulting in limited resources for operators to invest in new services and networks.

TMT Finance understands that Lap GreenN was among the bidders for Warid Telecom Uganda, having hired Analysys Mason as its buyside adviser. Lap GreeN was outbid by Bharti Airtel for that asset, with Bharti Airtel agreeing to pay Warid’s owner, the Abu Dhabi Group, around US$100m for the operator.

Despite various sanctions against Libya having previously caused certain financial obstacles for Lap GreenN, sources said the company was now assessing several acquisition opportunities across Africa, and in this respect had the backing from its owners, Libya Africa Investment Portfolio. Sources said Lap GreenN’s first port of call for financing such a deal would be via its parent, but that the company may also be open to debt financing, and had already been holding discussions with various international investment banks to this end.

Uganda Telecom also announced this week that is has appointed a new chairman and three board members, which appears to signify the beginning of a new era for the company, after several years of uncertainty. (See People News for full story).

While Uganda’s market leader MTN is also seen as a potential suitor for Orange Uganda and is likely to be monitoring the situation, sources noted that the South African company had less of a need to acquire in Uganda, with still close to 1 million more subscribers than its closest rival Bharti Airtel.

Vodafone’s subsidiary Vodacom could also be a contender, and was among those companies which bid for Warid Telecom Uganda last year. Sources said Vodacom would leverage its highly successful Safaricom business in Kenya to fund a deal, should it decided to pursue the opportunity.

As previously reported exclusively by TMT Finance on March 5, Lazard was drafted in by Orange to explore options of the French operator’s Ugandan and Kenyan units as part of a potentially wider mandate, which sources said could also see the sale or rejig of Orange’s businesses in other Anglophone countries. Orange owns a 95% in Orange Uganda and a 75% stake in Orange Kenya.

In response to the story, Bloomberg cites an Orange spokesperson as confirming a strategic review was underway in Kenya and Uganda. The spokesperson said Orange would: ‘… revise its position in the ownership structure of Orange Uganda during 2014’, and has ‘…engaged a process with a view to finding a new partner.’