State owned incumbent PTO Liberia Telecommunications Corporation (LIBTELCO) is reportedly close to announcing a takeover deal for the country’s number three mobile operator Novafone (formerly Comium Liberia), FrontPageAfrica writes, citing ‘multiple sources’. Unconfirmed reports suggest that the deal for the struggling cellco – TeleGeography estimates it has fewer than 300,000 subscribers in a market of close to three million – is worth around USD30 million, comprising a USD5 million upfront payment and the balance due within one year. That being said, Sebastian Muah, Managing Director of LIBTELCO, has dismissed the amount being speculated as incorrect, saying it will be closer to USD10 million in total – including USD7 million as the initial down-payment. Furthermore, it is being reported that if successful in its bid, LIBTELCO will offload a 60% stake in the cellco to UK-based Vodafone Group, which is already active in 26 countries and has partner networks in over 50 more.
Government-controlled LIBTELCO does not have a presence in the local mobile market and its possible move into the cellular segment comes just weeks after Orange Group bought out Cellcom Liberia through its Orange Cote d’Ivoire unit. It is thought that the deal is being funded by four local banks, IB, LBDI, Ecobank and GT Bank, which will also be providing a guarantee for the purchase. The online journal adds that Abi Jaoudi, one of the leading Lebanese businessmen in Liberia who is believed to be the major shareholder in Novafone, ‘has reportedly been struggling for months now to offload the struggling company but has been unsuccessful in finding suitors’. The market’s leading player by subscribers, Lonestar Cell-MTN, also courted Novafone at one point, but the deal fell apart over disagreements on things such as the asking price. Muah explained: ‘Our understanding of the complex Lonestar Cell-MTN deal is that the core network equipment was not part of the deal and Lonestar was willing to leave the modern core equipment, and again just buy Novafone out of competition for about USD16-USD18 million dollars, ignoring the likely loss of jobs and the network equipment valued at USD9 million. This would have put the[theoretical valuation] of Novafone at between USD25 million and USD27 million. We went for USD24 million, one million less than the worst case scenario.’