ZARNet to buy back Telecel in three years

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The National Social Security Authority (NSSA) is in negotiations with ZARNet over Telecel Zimbabwe after the former facilitated the acquisition of a 60% shareholding in the country’s third largest mobile operator.

BY BUSINESS REPORTER

NSSA facilitated the acquisition of 100% equity in Telecel International, which owned 60% of Telecel Zimbabwe, by ZARnet.

The acquisition, which was completed last year, was through a transfer of rights and a buy-back agreement in February 2016 and achieved through a mezzanine structure valued at $30 million, NSSA board chairman Robin Vela has said.

In a fourth quarter 2016 update, Vela said the advanced negotiations were in relation restructuring the transaction.

“The two parties are in advanced negotiations in relation to restructuring the transaction; wherein from a NSSA perspective it will culminate in an acceptable equity return and enhanced security arrangements, whilst the ZARNet perspective translates to a feasible and favourable financing structure,” he said.

“The effect of the new dispensation is that ZARNet will exercise the buy-back over a three-year period on terms enshrined in a new agreement involving a number of related-parties to ZARNet.”

The acquisition of 60% shareholding in Telecel Zimbabwe leaves government with a stranglehold over the telecoms sector, as it already owns another mobile operator, NetOne.

However, Telecel and NetOne trail Econet Wireless Zimbabwe in terms of subscriber market share.

According to a second quarter report by the Postal and Telecommunications Regulatory Authority of Zimbabwe, Telecel was the third largest mobile operator, with a 13,7% market share behind Econet (51,6%) and NetOne (34,7%).

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