VODACOM SEEKS TO REVIVE STALLED NIGERIAN DEAL
Cellular group Vodacom was working to revive stalled attempts to control Nigeria’s number two network by restructuring the deal, its major shareholder said last week. Belinda Williams, a spokesperson for Vodacom’s main shareholder, Telkom, yesterday said Vodacom’s owners had sent a team of Vodacom managers back to Nigeria just before Christmas to try to renegotiate a deal.
"They are looking at how they can structure the deal to provide better protection for shareholders," she said. Vodacom, owned by Telkom, Britain’s Vodafone and VenFin, has been battling with Johannesburg-based Econet Wireless for control of Econet Wireless Nigeria (EWN).
Econet is one of the founders and a 5 percent owner of the Nigerian operator, which also carries its name. It says it has first rights to the 33 percent stake in EWN that Vodacom had agreed to buy, and it is suing Vodacom.
Despite this, in mid-December Vodacom signed a management contract with the Nigerian operator, replacing Econet. Even though it has no equity stake, the management deal brings Vodacom head to head with MTN, which controls Nigeria’s number one mobile network.
Williams said the biggest obstacle to Vodacom’s investment in Nigeria was compliance with tough US anticorruption legislation, which its New York- and Johannesburg-listed owner, Telkom, and in turn its shareholder, SBC Communications, must follow.
EWN shareholders had originally offered to sell Vodacom a 33 percent equity stake, allowing the South African group to ultimately raise this to 50 percent plus one share in a $250 million deal.
But Econet, run by Zimbabwean entrepreneur Strive Masiyiwa, argues that its agreement with EWN gives it the right to raise its stake before an outsider can be considered. The International Court of Arbitration has agreed to appoint a judicial panel to hear the dispute.
Econet said last month it was also seeking up to $1.87 billion in damages from Vodacom for inducing EWN to breach its contract. Yesterday an EWN spokesperson said the group was in talks with Econet over the termination of the management contract.
"The contract, of course, had obligations on the part of those who terminated it and we have been in talks with Econet Wireless about their exit package," Emeka Oparah said from Lagos.