Vimpelcom sale perks up Telecel indigenisation

HARARE - Telecel Zimbabwe (Telecel) chairman James Makamba’s “optimism” that the local mobile operator can be fully indigenised may have arisen from Orascom Telecom (Orascom) parent Vimpelcom’s plans to sell its sub-Saharan assets.

According to reports, the Russian Group is in the final stages of concluding a deal to sell its Burundi, Central African Republic (CAR) and Zimbabwe assets — owned through Egypt-based Orascom and in which it has a controlling stake.

“All Telecel shareholders agree that there is need to comply with the laws of the land and will do everything possible to meet the requirements,” Makamba said, adding “a lot is happening behind the scenes”.

With Orascom owning 60 percent of the local mobile operator, Telecel has been under pressure from President Robert Mugabe’s government to regularise its shareholding structure in line with the country’s indigenisation policy — compelling foreign firms to cede 51 percent of their shares to black locals.

Through his Empowerment Corporation, Makamba’s consortium owns the other 40 percent.

Recently, Zimbabwe’s Transport and Communications ministry threatened not to renew Telecel’s mobile network operating licence if the shareholding issue is not addressed.

Having acquired the African and Asian portfolio — of Orascom — through a $6,5 billion merger with Naguib Sawiris’ group in 2011, Vimpelcom operates under the Telecel brand in Zimbabwe, the CAR and Leo in Burundi.

It also operates in Algeria through the Djezzy banner, where it is locked in an ownership dispute with the Algiers government.

With sources noting that Vimpelcom had “lined up concrete buyers” for its Burundi, CAR and Zimbabwean assets, this has prompted market expectations about Makamba’s bid to increase his shareholding in the mobile operator in Harare.

Although the identity of the “buyer” is not yet known, industry sources say it was a private equity investor as opposed to any one of the major international telecom groups and Standard Chartered is reportedly advising the transaction.

On a combined basis the assets are expected to be valued around $300 to 400 million.

“The Burundi unit is quite profitable, Zimbabwe has potential, and I expect a few parties will have been looking at it,” one banker told TMT Finance.

In 2012, the Anglo-Asian banking giant was hired to scout for buyers for Vimpelcom’s sub-Saharan Africa and Southeast Asia assets, as the group seeks to focus on strengthening its Russian, Ukrainian and Italian businesses.

“There is appetite from Orascom/Vimpelcom to refocus on Europe, CIS and Russia; anything peripheral to that is likely to go,” sources told the London-based telecoms sector specialist news provider.

Apart from sub-Saharan Africa, Vimpelcom is also thought to be pushing for the sale of its Laos business following the disposal of its Cambodian unit Sotelco (Beeline) to its local partner earlier this year, and the disposal of its 49 percent stake in Vietnamese operator GTEL in 2012, also to its local partner.

It is understood that Laos will conclude in a similar fashion, with a deal expected ‘within months’, one banker said. — Eric Chiriga with TMT Finance

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