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No cheap offers for Telecel as owners say they will only take best deal

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Telecel Go, Prepaid

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The issue of Telecel Zimbabwe’s ownership and its potential sale, which has been played out in the media for most of this year left most of us with the impression that the Government had all but secured a stake in the mobile network operator.

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It turns out, however, that Telecel Zimbabwe’s majority shareholder, Vimpelcom, is going to hold on to its stake and has a long term interest in the operator, It will, however, sell if the need arises, but will not give up of its stake in Telecel Zimbabwe for free. It will charge the market value for the shares to any interested bidder.

Yesterday, Vimplecom spoke to Zimbabwean media in Netherlands and the reports coming out of Amsterdam point out some important facts in the yet to be resolved Telecel Zimbabwe ownership issue.

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1.Vimplecom is committed to Telecel Zimbabwe  and has started contributing to turnaround strategy for the mobile operator through the deployment of expertise from Vimpelcom to assist in the execution of technical, market and commercial strategy.

2. According to Newsday, Vimplecom has stated that while it has committed to Zimbabwe, it will consider selling if the government continues to put pressure on its operations.

3. Government interference affected the completion of a deal that could have led to a change in Telecel’s ownership. An article in The Herald quotes Anton Kudryshov, the Chief Group Business Development Officer for Vimplecom as having said,

We were approached by potential buyers towards the end of last year. Some of the offers were attractive reflecting the potential of the business. We were in advanced negotiations with another buyer. However, we could not complete this process due to Government interference.

4. The discussions with Zarnet as a potential buyer of Telecel are ongoing. No sale has been made and nothing has been signed off which places Zarnet/the government in the same pool as other potential buyers. However, Vimpelcom seems to be unsure of Zarnet’s ability to make the right offer since it,

…is now looking for proof that Zarnet has funding for the transaction.

Beyond the very important concerns raised by Vimpelcom around government interference and the need for a conducive environment for foreign investment, one underlying aspect that seems to have been raised is how the Telecel ownership will be handled like a business deal first, and not a political move.

Vimpelcom’s insistence for the best value for its shareholding is a bold statement that any investor in Telecel, whether public or private, will have to appreciate. Any threats on licence issues won’t erode the asking price that Vimpelcom will attach to its investment.

If anyone, including the government, wants to have a stake in Telecel Zimbabwe, they will have to pony up the right amount.


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7 thoughts on “No cheap offers for Telecel as owners say they will only take best deal

  1. I heard the gorvernment is in tied by some agreement with the Netherlands and this I think will keep their greedy claws of Telecel. Any silly move by the goverment to try and take over at Telecel might blow every chance at any potential investment. Indigenisation is a good thing in some cases but in this one it seems like its going to keep trampling on the Tech industry

  2. Why couldn’t these guys fix their ownership issues several years ago without now having to act desperate. Why can’t they pay their licence in time and avoid any supposed clandestine fingers wanting a stake in the company. The fact of the matter is Telecel is in deep dept and has serious liquidity problems hence its value has depreciated

    1. Because where ever Telecel operates, it gets involved in local politics at the possible highest level. Check their involvement in DRC and Rwanda l think!

  3. Where is Supa on this?

    When you are dealing with companies which have strong international presents, you need to raise your standards to play at international levels.

    This is area l ask our reporters to ask hard questions but they are all scared. Its nothing personal, its called holding minister to account his words and action.

    Here is what techzim told us: http://www.techzim.co.zw/2015/07/government-confirms-interest-in-telecel/

    1.Why do not techzim ask on minister on contradictions he made.

    2. What picture are we painting to anyone who wants to invest here.

    3. What confidence are we showing when the minister who is suppose to know end up with egg on his face.

  4. true majaira strong arming vanhu for zvemahara. market value for a company is what everyone does anywhere else in teh world.

  5. Vimplecom wants return on the $70 million they put in tz in 2011. Telecel itself has debts from huawei, nokia networks and zte. It owes money to treasury for the licence. It is valued at slightly above $200 million and debts, depreciation and expenditure stand at around that figure leaving a deficit. Last year it invested a paltry $400 000 four hundred thousand in network development. Whoever is interested in telecel will have to pay a lesser amount considering he will shoulder such debts

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