Telecel negotiating its future with POTRAZ

Mergers, Acquisitions and Financial Results

Telecel, the struggling Zimbabwean mobile provider which is 60%-owned by Vimpelcom of Russia via holding company Global Telecom, has written to the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) in an effort to avoid the government-enforced closure of its networks. A report from Bloomberg quotes POTRAZ acting director general Baxton Sirewu as saying: ‘We’ve been engaging quite closely with Telecel Ltd and exchanging information.’ The cellco has been discussing its position with regard to missed payments on its USD137 million licence fee, plus its ownership structure, which does not comply with Zimbabwe’s black empowerment requirement of a maximum 49% foreign ownership. The government has said it has begun moves to shut down Telecel’s service.

While Vimpelcom and Telecel’s other shareholder, the Empowerment Corporation (E Corp) consortium, attempt to find a solution to the wireless operator’s problems, a number of potential new investors are circling as they smell the opportunity for a cheap acquisition. MTN Group of South Africa is one firm to have been linked as a prospective bidder, with some reports suggesting that a deal to take a 49% stake is close to being completed, while Unitel, the Angolan company backed by Africa’s richest woman, Isabel dos Santos, is also thought to be interested in Telecel. Meanwhile, the various E Corp shareholders continue to disagree over the best way to manage their own 40% interest.
Source: Telegeography 15 April 2015