On, off, on again: Novafone sale may go ahead after all

16 May 2016

Lonestar Cell-MTN, Liberia’s largest mobile network operator (MNO) by subscribers, is reportedly looking to acquire ailing rival Novafone (formerly Comium Liberia), just weeks after a failed takeover deal by state owned incumbent PTO Liberia Telecommunications Corporation (LIBTELCO) collapsed. The New Dawn Liberia newspaper quotes unnamed sources as saying that the final plan is being worked out for the takeover, claiming that ‘it is almost a done deal’. One source notes, however, that the Lonestar Cell-MTN deal is for less than the amount LIBTELCO was offering.

As previously reported by TeleGeography’s CommsUpdate, last week Liberia’s President Ellen Johnson-Sirleaf gave the thumbs down to LIBTELCO’s proposed takeover of Novafone, rejecting the deal ‘in its entirety, declaring to aides that it is not in Liberia’s best interest’, effectively killing LIBTELCO’s plan stone dead. Ms. Johnson-Sirleaf apparently instructed her acting finance minister James Kollie ‘to immediately terminate all negotiations regarding the Novafone deal’. It is unclear what led the Liberian president to scupper the deal, although the move came after the Liberian Revenue Authority shut the operator down in early May over an alleged non-payment of taxes worth around USD1.3 million – accrued between 2012 and 2014.

Prior to the President’s intervention, the managing director of LIBTELCO, Sebastian Muah, confirmed that his company had agreed a deal to acquire 100% of Novafone for around USD10 million. In a statement at the time he said: ‘The acquisition of 100% of the shares in Novafone means LIBTELCO can do what it needs to foster its commercialisation and strategies; and it means Novafone will continue to run, but with a new management team and direction.’ He went on to point out that Novafone was considered to be a ‘competitive asset’ that would allow his company to enter the mobile space with national coverage using a core network that has a viable long term lifespan. Muah said that LIBTELCO would invest upwards of USD5 million to build 100 cell sites on the Novafone network, suggesting that it would take up to two years to complete the full integration of the cellco.