Telecom Namibia bows out of Neotel
Vodacom SA’s agreement to acquire 100% of the shares of Neotel, in which Telecom Namibia (TN) is a minority shareholder, comes shortly before TN’s annual general meeting during which the company’s financial statements for the 2013 financial year would come under the spotlight.
The impact of the total investments in Leo, Mundo Startel and Neotel of close to N$1 billion over the past years has started to have a serious impact on the financial and operational efficiency of Telecom Namibia.
This has resulted in a reduction of the group’s operating yield from a profit of N$117 million in the 2011/2012 financial year to a loss of N$140 million in the 2012/2013 book year.
Telecom Namibia has monitored the purchasing process closely and pending a firm offer acceptable to the company, consideration would be given to exit from Neotel.
“As part of the Neotel sale to Vodacom, Telecom Namibia as a minority shareholder will relinquish its involvement in Neotel in South Africa,” said Frans Ndoroma, MD of Telecom Namibia.
Dr Catherine Beukes-Amiss, current chairperson of the Telecom Namibia Board of Directors, says: “The latest development is positive at it will enable Telecom Namibia to now focus specifically on the local Namibian market.”
According to a press release, “The shareholders of Neotel and Vodacom SA have announced that they have favourably concluded an agreement on the commercial structure and terms to proceed for Vodacom to acquire 100% of the shares of Neotel valued at an enterprise value of R7 billion. This follows the announcement late last year that the parties were entering into exclusive talks for a due diligence.”
The structure of the deal and its commercial terms remain subject to regulatory and competition authority approvals and the parties will be immediately commencing the necessary processes in that regard.