Telecel takeover in new twist

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\n HARARE – National Social Security Authority (Nssa) said it will relinquish its controlling stake in Telecel Zimbabwe to Zarnet after three years, as a way of protecting its investment.

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\n This was after the deep-pocketed pensions administrator poured in $30 million to help Zarnet secure $40 million it needed to acquire a 60 percent stake in Telecel Zimbabwe from Telecel International.

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\n Under the initial agreement, Nssa only acted as a financier but later indicated that it wanted overall control of the country’s third largest mobile telecommunications company on the premise that the technically-insolvent Zarnet may not be able to pay back the $30 million debt.

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\n The State-run pension fund’s chairman, Robin Vela, yesterday said his organisation was engaging Zarnet to restructure the deal.

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\n “The two parties are in advanced negotiations in relation to restructuring the transaction; wherein from a Nssa perspective it will culminate in an acceptable equity return and enhanced security arrangements, whilst the Zarnet perspective translates to a feasible and favourable financing structure.

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\n “The effect of the new dispensation is that Zarnet will exercise the buy-back over a three year period on terms enshrined in a new agreement involving a number of related-parties to Zarnet,” Vela said, in his fourth quarter 2016 update.

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\n This comes as recent reports indicated that Nssa was not “entirely happy” about the prospect of losing out on an equity holding in Telecel Zimbabwe — or just playing the role of a financier and — where it sees huge opportunities for rich pickings, and acquiring an asset that can add value to its policy holders.

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\n Although Vela believes that Nssa —given a chance — has the capacity to turn around Telecel Zimbabwe,

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\n ICT minister Supa Mandiwanzira, however, insisted that Zarnet is buyer and owner of Telecel, not Nssa.

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\n “Zarnet is the buyer of the Telecel shareholding from VimpelCom, and it paid its own money ($10 million), except the $30 million secured through a funding structure with Nssa,” he said in an interview recently.

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\n “The structure is such that Zarnet will secure the equity interest and for its part Nssa is getting a bargain buying debt of $98 million for only $45 million. In order to ensure a smooth execution of the deal, Zarnet and Nssa have agreed a step-in agreement which allows Nssa to enjoy Zarnet’s rights as the purchaser, albeit temporarily.

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\n “The agreement between the two parties is to that effect.

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\n “Obviously, we understand where Nssa is coming from. They have to protect pensioners’ funds and that’s why the two parties have agreed on that sort of a structure,” Mandiwanzira added.

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