MTN closes in on Telecel

HARARE – Africa's leading mobile operator MTN has agreed to buy some of the assets of Egypt’s London Stock Exchange (LSE) listed telecommunications giant, Orascom, which include Telecel Zimbabwe and Burundi, a senior government official has said.

The possible inking of the agreement resulted in the LSE on Friday suspending Orascom Telecom Holding SAE's (ORSTF) shares from trading, pending the conclusion of the deal.

If successfully concluded MTN’s purchase of Orascom’s Zimbabwe assets will become the first major deal in the country involving foreign interests since announcement last February of controversial regulations to force foreign-owned firms to cede majority stake to local blacks.

The indigenisation regulations give foreign-owned firms up to May 15 to submit proposals on how they intended to offload 51 percent stake to indigenous Zimbabweans by March 2015.

Speaking on condition that his name was not published, a senior official from the Post and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ), said at the weekend MTN would comply with the country’s indigenisation law.

"MTN will retain 49 percent in Zimbabwe, once the payment goes through to comply with POTRAZ," said the source, adding; "Under the deal, MTN has agreed to buy some of Orascom's operations in Zimbabwe and Burundi.
“The actual value of the deal could be as high as $10 billion if it goes through. This will also be good news to Zimbabwe given the problems that have been caused by the indigenisation and empowerment law."

MTN could not be reached for comment at the weekend.

Through its subsidiary Telecel Globe, OTH also operates in the Central African Republic, Namibia and Zimbabwe. Orascom Telecom had over 88 million subscribers as of September 2009.

MTN has vast business interests spanning across the continent and the Middle East.

Indigenisation Minister Saviour Kasukuwere has said the empowerment programme will first target the mining sector where some of the world’s biggest international corporations hold multi-million dollar investments.

According to Kasukuwere to date 400 firms have submitted empowerment proposals to his ministry.

The economic empowerment scheme has split the Harare coalition government with President Robert Mugabe and his ZANU PF party backing the plan.

But Prime Minister Morgan Tsvangirai and his MDC party want the indigenisation programme stopped to allow for more consultation and drafting of new regulations that will not scare away foreign investors, while allowing for economic empowerment of the majority.

Large multinational corporations such as cigarette manufacturer BAT Zimbabwe, which is 80 percent British-owned, UK-controlled financial institutions Barclays Bank and Standard Chartered Bank, food group Nestlé Zimbabwe, mining giants Rio Tinto and Zimplats, and AON Insurance are some of the big foreign-owned firms that will be forced to cede control to locals.
– ZimOnline