Zimbabwean private equity firm Brainworks Capital has the outline of a deal to buy 40% of local mobile operator Telecel.
The stake is currently held by local consortium Empowerment Corporation (EC), while VimpelCom-controlled Global Telecom Holding…
Zimbabwean private equity firm Brainworks Capital has the outline of a deal to buy 40% of local mobile operator Telecel.
The stake is currently held by local consortium Empowerment Corporation (EC), while VimpelCom-controlled Global Telecom Holding (GTH), based in Cairo, owns the balance.
Brainworks will buy EC’s 80 million shares for US$20m in cash providing EC’s shareholders approve the transaction at a meeting on 20 February, TelecomFinance has confirmed.
In response to a request for comment, Telecel said its management was not privy to shareholder issues and was not in a position to comment at this stage.
VimpelCom has been reported to be ready to exit Telecel for some time and, in December, state media said it had invited bids, however VimpelCom has told TelecomFinance that this is just speculation.
The Russia-focused operator has been under pressure from Zimbabwe’s government to shrink its stake to a minority holding in recent years. The country’s Indigenisation and Economic Empowerment Act stipulates that previously-marginalised black Zimbabweans must hold at least 51% in any local registered firm.
The local ownership issue almost led to the government blocking the renewal of Telecel’s 2G and 3G licences in 2013. The operator’s spectrum was renewed under the condition that it addressed its ownership situation. But since then, its shareholding structure has not changed.
Last October, VimpelCom sold its Telecel Globe subsidiary, which has mobile operations in Burundi and the Central African Republic, to Econet Wireless Global for US$65m.