Harare-based private equity firm Brainworks Capital is interested in acquiring the 60% stake VimpelCom holds indirectly in Zimbabwean mobile operator Telecel.
Brainworks already has an agreement in principle to buy 40% of Telecel from local consortium…
Harare-based private equity firm Brainworks Capital is interested in acquiring the 60% stake VimpelCom holds indirectly in Zimbabwean mobile operator Telecel.
Brainworks already has an agreement in principle to buy 40% of Telecel from local consortium Empowerment Corporation (EC), and TelecomFinance understands that it could be the first step to the investor taking full control.
The firm 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. It is also looking for assurances from VimpelCom on its intentions.
Should VimpelCom, which sold its other sub-Saharan assets last October, choose to exit Telecel, then Brainworks has the capacity and willingness to buy it out, according to a person with knowledge of the matter.
VimpelCom and Brainworks declined to comment.
VimpelCom has come under pressure from Zimbabwe’s government to sell down its stake – held through Cairo-based Global Telecom Holding – to a minority holding in recent years, and was reported to be courting bidders last December.
The country’s Indigenisation and Economic Empowerment Act stipulates that previously-marginalised black Zimbabweans must hold at least 51% in any local registered firm.
However, the enforcement of the act is at the government’s discretion and can be waived if a settlement can be reached.
If Brainworks acquires 100% of Telecel, it could look to bring in another foreign operator as a strategic partner further down the line.
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.