Vodacom deadlock nearing end

18 Jan 2012

A spokesperson for Vodacom has announced that the company is close to resolving a dispute that has prevented major investment in the telco’s Congolese operation since 2009, reports Bloomberg. South Africa-based Vodacom Group, 51% stake holder of Vodacom Congo, has been involved in a quarrel with its local partner in the Democratic Republic of Congo (DRC), Congolese Wireless Networks (CWN) over the South African company’s plan to inject USD484 million of capital into the joint venture. CWN moved to block the investment, claiming that it would dilute CWN’s 49% share in the company, as its shareholders would not be able to finance their half of the funding. The case was referred to the International Chamber of Commerce (ICC) in Brussels for arbitration in March 2010, though the matter has yet to be put to the court. Vodacom announced in May last year that it was exploring options, including withdrawing from DRC by selling its stake in Vodacom Congo: following that announcement, fellow South Africans MTN expressed an interest in purchasing the stake, as did Angola’s Unitel.

Kinshasa’s Supreme Court ruled in October last year that CWN’s chairman and founder, Alieu Conteh was to be suspended, after trying to prevent Vodacom from selling its stake. The decision was overturned, however, and Conteh is still involved in the talks. Johan Dennelind, Vodacom’s head of international operations said: ‘We’re making good progress and getting closer to a solution.’ Dennelind did not clarify his statement, leaving it unclear whether or not the ‘solution’ was a resolution of the structuring and financing dispute, or an agreement regarding terms for the sale of Vodacom’s share in the telco.

Congo, Dem. Rep., Vodacom Congo (DRC), Vodacom Group