The owner of struggling Namibian telecom operator Leo has turned to the country’s high court to prevent the company from being liquidated by the end of the month, according to local newspaper The Namibian.
Leo is currently in the process of merging…
The owner of struggling Namibian telecom operator Leo has turned to the country’s high court to prevent the company from being liquidated by the end of the month, according to local newspaper The Namibian.
Leo is currently in the process of merging with incumbent Telecom Namibia. The Namibian Competition Commission (NaCC) has already approved the deal but the Communications Authority of Namibia (Cran) has imposed conditions, which are impossible to comply with, Leo’s owner Guinea Fowl Investments (GFI) reportedly stated.
These conditions reportedly include the partial privatisation of Telecom Namibia and, prior to that, amendments to the Post and Telecommunications Establishment Act for the promotion of private investments in the telecoms sector.
But GFI, which is a JV between Investec Bank and Nedbank, is concerned that if the merger is not approved by the end of August, Leo will be liquidated. It therefore asked the court to scrap those conditions.
However, Cran reportedly said it is not responsible for Leo’s losses and that it was within its rights to impose those conditions.
These are aimed at alleviating monopoly concerns, as the government controls two of Namibia’s three mobile operators: MTC and Telecom Switch (owned by Telecom Namibia).
Leo was sold to Investec and Nedbank by Egypt’s Orascom Telecom in July last year. The transaction had a value of US$60m, representing Leo’s liabilities.
Leo and Cran were not available for comment before the press deadline.
