Startel divestment nearing conclusion?

9 May 2012

A report by The Namibian newspaper says that a previously announced move by Telecom Namibia to divest its entire 44% stake in Angolan fixed network operator Mundo Startel is nearing completion, with an urgent meeting between local management and the Namibian telco expected soon to finalise the latter’s exit from the joint venture it regards as ‘no longer viable.’ A year after announcing the decision to quit the partnership in May 2011 to scrape back some of its investment in the non-profitable unit, Telecom has scheduled a ‘final’ meeting in Luanda. Corporate Communications spokesperson Oiva Angula told The Namibian: ‘This is a follow-up meeting of the one that was held in March this year during which certain proposals were made after the Angolan partners agreed to buy Telecom Namibia’s shares. We have to ensure that we recover our investment.’ The report states that Telecom has over the past seven years lost a total of more than NAD100 million (over USD12.6 million) through the investment in Mundo Startel. Angula stated that the Namibian company impaired the carrying value of the investment in its financial statements by NAD18 million in 2011 to bring the accumulated impairment loss of the investment to NAD79 million. In 2005 Telecom initially spent NAD29.8 million on the 44% stake and subsequently invested NAD162 million; it provided start-up capital and loans to the tune of NAD146.3 million to get the business off the ground and build an initial network in Luanda, but a national expansion plan was never implemented, with various problems cited including lack of necessary capital and non-allocation of required fixed-wireless frequencies. Last year the management of the company was transferred to the Angolan partners, which are now understood to be offering Telecom a cash payment of around NAD15 million, plus the issuance of around NAD94 million preferred shares be paid with a premium if and when Startel becomes profitable.

Angola, Startel (Angola), Telecom Namibia (incl. TN Mobile)