India’s Bharti Airtel will appeal a decision by the Nigerian court of appeal with regards to a long-standing dispute over the ownership of its unit Airtel Nigeria.
Since early 2012, Telecoms group Econet Wireless has been looking to obtain at least…
India’s Bharti Airtel will appeal a decision by the Nigerian court of appeal with regards to a long-standing dispute over the ownership of its unit Airtel Nigeria.
Since early 2012, Telecoms group Econet Wireless has been looking to obtain at least US$3.1bn in damages after the country’s federal high court ruled that the acquisition of a majority stake by the Indian operator in Zain Nigeria – now known as Airtel Nigeria – in 2010 was “null and void”.
This is because Econet, originally a 5% shareholder in the local wireless player, had allegedly not been notified of this transaction, as well as of other share transfers since 2003.
A few days ago, the court of appeal reportedly upheld the ruling. Bharti subsequently said it will lodge an appeal at Nigeria’s supreme court. It however added that the judgement has no impact on its 79% equity holding in Airtel Nigeria.
“These [5%] shares in any case are held in an escrow account and do not affect Bharti Airtel’s 79.06% stake in Airtel Nigeria,” it said in a statement.
Bharti also stressed that concerning the reported US$3bn sought by Econet, “no such quantum has been determined”.
Econet argues that its 5% stake in Airtel Nigeria was unfairly cancelled 11 years ago – long before Bharti took over the mobile operator – and that it should have been consulted on any subsequent transactions.
Over the years, Airtel Nigeria has changed hands many times with the company’s name being modified accordingly.
Most notably, in 2006, Kuwait-based Zain bought the African operations of Celtel International, including the one in Nigeria, for US$3.4bn. It sold them four years later to Bharti for US$10.7bn.
In March last year, the Indian giant boosted its stake in the Nigerian operator to 79% by acquiring an additional 13.4% interest from existing shareholders.
Bharti is currently offloading its towers in Nigeria, as well as in other African countries. Its total site portfolio value has been estimated at US$2bn and deals are expected to be announced within the next few weeks.
