OLD MUTUAL UNIT, TATA IN LINE FOR WAREHOUSED 26% STAKE IN SA'S SNO
Three bidders have been selected as potential buyers of a 26% stake in the second network operator , including Old Mutual Asset Managers and India's Tata Africa Holdings. A third unnamed group has also qualified to compete for the controlling stake, said Communications Minister Ivy Matsepe Casaburri last week. However, it must be a weighty contender to have met the required R5bn balance sheet and five years' experience in the telecommunication sector.
The winner will have its work cut out in quelling internal squabbles among the second operator's existing stakeholders, Eskom Enterprises, Transtel, Nexus, CommuniTel and Two Consortium.
Nexus, with 19%, is threatening legal action to challenge the minister's decision to include Two Consortium and CommuniTel, since they were both initially rejected as substandard. On October 26 Nexus will apply for an interdict to halt the licensing process if there is no agreement on the shareholding structure.
Since the second network operator will probably invest between R3,5bn- R5bn in the business, 26% should be worth between R1bn- R1,5bn.
The news could finally see government getting the foreign direct investor it has long been seeking, since Tata Africa is an offshoot of the Indian conglomerate Tata Holdings, which owns 80 companies in various sectors, including telecommunications.
Tata would also give the operator political links in India, as it is bidding alongside VSNL, a telecommunication company 26% owned by the Indian government. VSNL is listed in India and in New York, with Tata holding 45% of its shares.
The head of Tata Africa, Raman Dhawan, said he would comment on why Tata wanted to control the second network operator "when the time is right".
In SA, Tata Africa owns a stake in the technology company Consilience. Consilience is also part owned by the J&J Group, set up by former communications minister Jay Naidoo. Old Mutual owns 25% of J&J, and is now competing against Tata for a stake in the second network operator.