Telecel deal to be finalised

via Telecel deal to be finalised – DailyNews Live • 22 January 2016

HARARE – President Robert Mugabe’s government was this week expected to pay VimpelCom Limited (Vimpelcom) about $30 million in outstanding funds for a 60 percent stake in Telecel Zimbabwe (Telecel), businessdaily has learnt.

Although company executives, including chief executive Angeline Vere, were unreachable for comment, at least three independent sources said that the National Social Security Authority (Nssa) — the backer of government front Zarnet — was this week expected to release the balance of a $40 million valuation for the telecommunications firm.

“You will know that those guys (government) paid a $10 million commitment fee, but the balance was due this week. But given our national finances, it remains to be seen whether they make it and, according to the agreement, Zimbabwe will forfeit that money if it does meet the deadlines,” they said.

In one of the most unprecedented hostile takeovers in the country, Vimpelcom was last year forced by the Harare administration to dispose off its Telecel stake to little-known Zarnet, despite the company being valued at over $300 million.

The Amsterdam-headquartered telecoms services provider was initially paid $10 million by the cash-strapped Zarnet — through Nssa — in October 2015 with the understanding that the remainder would be paid within 90 days.

Critics say the state-owned internet service provider was being fronted by hawks in Zanu PF to take control of Telecel under the guise of indigenisation policies.

According to a report by Auditor-General Mildred Chiri for the year ended December 2014, Zarnet is technically insolvent, yet it has been allowed to piggyback Nssa’s $1,2 billion balance sheet to purchase the potential lucrative mobile phone company.

Despite wanting to carve a deal for itself — to create cash-flows of up to $72 million a year and to feed its pensioners — Robin Vela’s board was clearly forced, if not bullied, by Communications minister Supa Mandiwanzira into backing the shadowy Zarnet in the complex transaction.

According to leaked e-mail communications between the ex-investment banker and the Nyanga North legislator, it is clear that Nssa would have wanted the troubled asset for itself, but things changed when the Zanu PF-led government started forced its way through to ensure that the pensions administrator was a “mere funder”.

But throughout the episode, Vela seemed unwilling to commit pensioners’ money into that kind of a role since it was beyond Nssa’s mandate.

And if the Vimpelcom deal goes through, Mugabe’s government will have a firm grip on the telecommunications industry as it already owns NetOne and TelOne.

Amid indications that the Harare administration would merge Telecel and NetOne — to take Econet Wireless head-on — another school of thought says  state functionaries want to restructure this asset and sell it to Angolan billionaire Isabel Dos Antos’s Unitel, if not use it for further surveillance.

Telecel has in the past fought running battles with state regulators for failing to pay for its $138 million operating fees, hence its licence was invalidated.

As it is, critics not only query the prudence of the government’s decision to hand over the 60 percent stake to cash-strapped Zarnet, but the existence of an undisclosed 7 percent shareholder under Mandiwanzira’s deal.