Leo part of world’s mobile giant

YET another new day has dawned for Leo which will now become part of the fifth largest mobile operator in the world after Russia’s Vimpelcom decided to merge with Egypt’s Orascom, the sole shareholder in Namibia’s second cellphone service provider.

Vimpelcom and Orascom confirmed the more than US$6,5 billion deal late on Monday. Under the agreement, Vimpelcom, Russia’s second largest mobile operator, would buy 51,7 per cent of Orascom Telecom via Weather Investments, the investment company headed by Egyptian telecom mogul Naguib Sawiris. The transaction also includes Vimpelcom acquiring all the shares in Italy’s Wind Telecomunicazioni SpA, also headed by Sawiris.
‘It is business as usual at Leo Namibia,’ Stanley Similo, Leo’s Chief Human Resources, Corporate and Regulatory Officer, yesterday told The Namibian, adding that the process ‘will take some time to implement and be enacted’.
By yesterday afternoon, Leo had not informed Information and Broadcasting Minister Joel Kaapanda about the deal yet. He only knew about the negotiations from media reports, Kaapanda told The Namibian.
As before, the Minister repeated that Government doesn’t approve of complete takeovers of information and technology companies by foreigners and said that legally 51 per cent of Leo should be in Namibian hands. He also referred to Leo’s promise that it would seek a black economic empowerment (BEE) partner for a 30 per cent stake in the company.
‘Whatever happens, Leo should keep its promises,’ Kaapanda said.
This is the third time in four years that Leo, formerly known as Cell One, has changed shareholders.
The company changed its name to Leo, the Swahili word for ‘today’, late last year after a controversial transaction early in 2009 whereby founding owners Powercom sold the entire company to Telecel Globe, a subsidiary of Orascom, for nearly N$600 million.
Government was furious about the move as Powercom didn’t consult with them before selling all the shares to foreigners. When the company received its license in 2006, Cell One belonged to the Powercom consortium, consisting of Norwegian telecoms giant Telenor with 39 per cent of the shares, NamPower (37 per cent), Nam-mic (12 per cent), Old Mutual (ten per cent) and the Powercom Educational Development Trust (two per cent).
Government eventually calmed down, but demanded that Leo brought a BEE partner on board soon. Leo last July commissioned NedCapital Namibia for the hunt, but has up to now not delivered the required BEE partner.
In a strange twist to the latest developments, Leo now once again have a connection with Telenor. Vimpelcom is jointly owned by Russia’s Alfa Group and Telenor. Under the new deal, Telenor will hold 31,7 per cent of the shares in Vimpelcom.
Commenting on the transaction, Vimpelcom’s Chairman Jo Lunder said the combination of Vimpelcom and Orascom ‘creates a top tier global telecoms company with strong platforms across Europe, Asia and Africa’.
Sawiris said he was confident that Orascom’s minority shareholders would ‘benefit from the synergies created by the combination of the two entities’.
The deal marks the second attempt by Sawiris to sell some or most of Orascom’s non-Egyptian assets this year.
An earlier deal with South Africa’s MTN Group fell apart largely because of a dispute between the Egyptian firm and Algeria over some US$600 million in back taxes owed by Djezzy, its Algerian unit and the company’s chief cash cow. Algeria had blocked the deal, saying it had the first option to buy the Algerian unit. The country, however, has yet to move on that purchase.
The cash and shares in Monday’s deal will create the world’s fifth-largest mobile operator, worth around US$23 billion and with 174 million mobile subscribers.
– Own report and Nampa-Reuters-AFP-AP

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