Vimpelcom today finally announced officially the takeover of its subsidiary Telecel Zimbabwe by ZARNet the Government owned ISP, for a sum of US $40 million. The current Telecel CEO, Angeline Vere, went on to advise staff in Zimbabwe of the change in ownership, that is them now being civil servants.
That the government was interested to buy Telecel Zimbabwe was first announced back in July but until late September, Vimpelcom maintained they would only sell if the price was right. Whether the $40M price makes sense for their investment into the company to date is doubtful though. The company put in $70 million just 3 years ago and is reported to have invested some $237 million since 2009.
Sensing the danger when the indigenisation pressure mounted, Vimpelcom took a more hesitant approach to injecting more money and started, in their financials, reporting the investment at cost, before making no mention of it altogether eventually. Between indigenisation, fellow shareholders (Makamba and company) that Zimbabwe’s ruling party hate for political reasons, unpaid license fees by Telecel, Ousted shareholders that wanted back in (Jane Mutasa, War Veterans, Chiyangwa), Vimpelcom had little leverage.
The takeover propels ZARNet into one of the biggest tech companies locally as it already operates an ISP business, website design business as well as an IT company called Portnet Software (provides SAP consultancy) which government took over in September this year.
Here’s the full Vimpelcom release:
VimpelCom and Global Telecom enter agreement to sell their operations in Zimbabwe
msterdam (November 18, 2015) – VimpelCom Ltd. (“VimpelCom”, “Company” or “Group”) (NASDAQ: VIP), a leading international provider of telecommunications services headquartered in Amsterdam, today announced that its 51.9% owned subsidiary, Global Telecom Holding S.A.E. (“GTH”), has entered into an agreement with ZARNet (Private) Limited to sell its stake in Telecel International Limited for $40 million. Telecel International owns 60% of Telecel Zimbabwe (Pvt) Ltd. Transfer of ownership to ZARNet will occur after customary conditions are satisfied.
ZARNet is wholly owned by the Government of the Republic of Zimbabwe through the Ministry of Information & Communication Technology, Postal and Courier Services.
Disclaimer
This release contains forward-looking statements. Forward-looking statements are statements that are not historical facts, and include statements regarding the ability to complete, the expected timing of completion and the related potential benefits of the transaction described above. Forward-looking statements involve inherent risks, uncertainties and assumptions, including, without limitation, the possibility that the transaction may not materialize as expected or at all. If such risks or uncertainties materialize or such assumptions prove incorrect, actual results could differ materially from those expressed or implied by such forward-looking statements and assumptions. The forward-looking statements contained in this release are made as of the date hereof, and GTH expressly disclaims any obligation to update or correct any forward-looking statements made herein due to the occurrence of events after the issuance of this release.
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21 comments
Mean while, in the not so long future to come, an Act of Parliament will be raised to transfer Zarnet’s debt into gvt debt and tax will be raised to try and keep a bloated non productive gvt afloat.
So the government now owns 3 telecoms companies with GSM licenses (NetOne, TelOne and Telecel). Is there any logic to this (besides the obvious anti-Gammatox powerplay)?
My condolences to all Telecel employees on this sad day. It looks like I’m going to have to move back to Econet again.
Kkkkkkk! Nematambudziko.
it has been good using Telecel for the past 2 years for my mobile internet services but it looks like l will be forced to move back to Econet in the not so distant future.
good move by the government, what a calculated strategy, lets see those who thought they had a monopoly in steel towers will react to this. Govt has actually made a good investment i hope they buy out the remaining shares and own the company 100%.
What good move when you are forcing yourself into a company:
http://www.newzimbabwe.com/news-26142-Minister+forces+NSSA+to+fund+Telecel+seizure/news.aspx
Vimplecom sold to the Govt willingly.I dont see how the govt forced its way into Telecel here.
willingly when you threaten to cancel license etc etc. Just like parastals heads are asked do “donate” willingly to the Party activities.
I bet these government telecoms will start sharing infrastructure very soon.
Now three GSM licenses, there are selfish and greedy crooks in Zanu-PF government corridors, Telcel is doomed!
Now three GSM licenses? there are selfish and greedy crooks in Zanu-PF government corridors, Telcel is doomed!
Instead of focusing on building roads, hospitals & schools, the government think they can build a viable & profitable company. Look at the companies they already have in this sector, there performance is sub standard. Leave business to capable business people & focus on politics!!!
This is simple maths
Govt will soon sell its stake to a consortium led by Supa. The kingpin of this dubious transaction.
..and it will be sold for 1million payable over a period of 70 years. A deposit of $1000 will be required to effect the changes
thumps up Hon SUPA ! Now gov need to focus on the SOFTWARE DEV INDUSTRY
If u dont pay your licence it should be cancelled its simple logic. One should not operate without paying a licence and expect to get away with it.
But Telecel has been soing just that!! How much is NetOne paying or paid, especially taxes??
Netone’s licence is due to expire in 2017. When it started operating in 1996 it did so as a division of PTC and hence used their licence. Only after 2000 when the PTC was disbanded Netone was issued its own licence. Thats why people havw a misconcepion that their licence should have expired earlier than Econet’s since they started operating before it. About taxes , they do pay, Zimra clllecrs their dues from them and that includes vat as well.
You do not give directives for the economy to grow! Chokwadi chichabuda hacho
this is our only chance of a peacefull strike..let everyone throw down their telecel line..lets mass downsize their subscribers to nearly 100..go ahead and tell some1
Can’t be we be optimistic for once. I don’t see the logic in calling for a boycott of Telecel services. So far they are peforming very well. Chii nesu maZimbabweans?