Local consortium wants Telecel; Sawiris keen to offload cellco

20 Aug 2007

A local consortium named Konfluens has approached Zimbabwe’s government with a proposal to buy a 60% stake in troubled cellco Telecel Zimbabwe, currently held by Telecel International, itself owned by Egypt’s Orascom Telecom, reports Businessdigest. In a letter dated 3 August, Konfluens said it has already raised the foreign currency to buy the stake: ‘Konfluens, a Zimbabwe controlled private equity consortium with business interests in the UK, Malawi, South Africa and recently Angola, hereby advise you that we are pursuing the available shareholding with Telecel International…The requisite foreign funding is now in place through our international structures and we have also prepared technical and additional funds [apparently partly from Chinese investors] for the rehabilitation of Telecel Zimbabwe’s infrastructure.’ Konfluens chairman, Parkvoo Mutendera, director of Columbus Communications Group, confirmed launching a bid for Telecel, which he said was intended to grow the group’s portfolio of telecoms assets held in Malawi and Angola. Mutendera also said the consortium had contacted Telecel International, and that the Egyptian company was ‘not hostile’ to a deal, but that the Zimbabwean government was yet to give a conclusive response to the proposal. Earlier this month Telecel Zimbabwe was temporarily saved from being closed down by a court order, after falling foul of government foreign ownership rules. The GSM operator’s 40% owner, the local Empowerment Corporation (EC), has pre-emptive tights to an 11% stake to take majority control of the company, but last month, two partners in EC, James Makamba and Jane Mutasa, failed in an attempt to buy the shares from Telecel International for USD3.5 million. EC is likely to try and block any ownership deal that it is not involved in, whilst the government is likely to favour a deal that does not involve a loss of foreign currency from the crisis-hit economy, ideally a takeover of Telecel International’s stake by another foreign operator. Another mooted possibility is the merging of Telecel’s network with its state-run GSM rival NetOne.

Meanwhile, Orascom Telecom chairman Naguib Sawiris is reported to be putting together a deal with unnamed parties under which Telecel Zimbabwe could become part of a bigger pan-African group, The Financial Gazette reports. Sawiris has indicated that he is not interested in being a third player in Zimbabwe, maintaining that: ‘when you miss your chance to become really dominant, it’s very hard to come back.’ ‘There are discussions now to create a pan-African player to which we can contribute our [Zimbabwean] assets,’ Sawiris was quoted as saying in May by news agency Reuters.