Japan’s Ocean Cable & Communications Corporation (OCC) is preparing to acquire Smart Telecom for NPR12 billion (USD99 million), reports Fiscal Nepal citing unnamed government sources. Senior executives of the two companies are said to have signed a deal in late February, subject to a due diligence audit to be performed as soon as possible.
Yokohama-based OCC, a manufacturer of submarine communications cable, has reportedly demanded Smart Telecom pay the NPR4 billion in outstanding regulatory fees and royalty payments owed to the government, as well as other liabilities including bank loans, before a due diligence is conducted. Following repeated warnings that its licence would be revoked for non-payment of fees, Smart was finally granted permission to clear the debt by July 2020 in a series of instalments. However, the troubled operator once again failed to meet its commitments, prompting the government to freeze its assets.
Despite being the country’s third largest mobile network operator, Smart Telecom has only a limited stake in Nepal’s telecoms market, claiming just 2.28 million wireless subscribers and 6.0% market share at 31 December 2020.