Wanted: BEE partner for Cell One

CELL One’s state-required hunt for black economic empowerment (BEE) partners, which will transfer some of the shareholding of sole owner Telecel Globe back into Namibian hands, starts today.

One hundred per cent of Namibia’s second mobile operator currently belongs to the Egyptian telecoms giant, Orascom Telecom Holdings, through its wholly owned subsidiary, Telecel Globe. When Orascom bought Cell One for some N$600 million from Telecom Management Partner (TMP), NamPower, Old Mutual Namibia and Nam-mic in January, it was on condition that the company invites BEE partners within six months.Namibia’s new Communications Bill requires a 51 per cent Namibian shareholding for all operators. Company deals concluded prior to the implementation of the act, are excluded from this requirement, though.Except for requirements that prospective partners must have a broad-based BEE background and be able to guarantee adding value to Namibia’s second mobile operator, nothing about Cell One’s prospective BEE deal is cast in stone.The process will, however, be open and transparent, Cell One Chief Commercial Officer Chris Keeping assured at the launch yesterday.NedCapital, appointed as financial advisors to Telecel Globe, will handle the entire process locally with Cell One playing an ‘extremely limited’ role. The company specialises in corporate financial advice and project financing and has been involved in some of the major BEE transactions in Namibia, including Old Mutual Namibia and Nedbank Namibia.They are not looking for ‘the same old faces’. Neither for passive partners, NedCapital Managing Director Steve Galloway said.Mobile growth prospects lie at grassroots level, he said. The successful partners must therefore have broad-based credentials.Sure, they must be high-profile individuals or prominent businessmen, but they must also be able to help sell the product, Galloway said.’It is highly unlikely that it will only be one partner,’ he said.Neither will they be candidates from the now familiar pool of regular empowerment beneficiaries who have shrouded BEE in Namibia in controversy.Partners will have to meet a ‘whole lot of benchmarks’, Galloway said. They will also have to add value.’If they already serve on a number of boards, they won’t have the time to add value,’ he said.In the absence of a national BEE policy, NedCapital has no guidelines regarding the extent of the shareholding of the new partners.They will consider proposals, keeping the option open to increase BEE shareholding in increments, Galloway said. Cell One is not just looking for a new BEE shareholder, it will also consider staff ownership, he continued.Generally, NedCapital works on initial shareholding of between 2,5 per cent and 10 per cent in empowerment deals.In Cell One’s case, this will mean a BEE investment of between N$60 million and N$80 million.Questioned on how big the deal will be, Galloway answered: ‘How long is a piece of string?’Both NedCapital and Cell One, however, stressed that the BEE deal is not about raising capital, but about meeting Government’s requirement for empowerment.The new partners will be expected to contribute ‘pro-rata’ to the operator’s expansion strategy, though. Galloway did not exclude the possibility that NedCapital might finance the BEE partners.The whole process will take between six months and a year, he said.Anything under six months will be ‘irresponsible’, and if the process drags on for more than a year, prospective investors ‘may loose interest’.’Hopefully we’ll be somewhere in the middle,’ Galloway said.The process will be run in three phases. Firstly, potential investors will be invited to express their interest. Advertisements to this effect started running in the media today.Then a selection process, based on selection criteria, will take place. Thereafter, short-listed candidates will be invited to submit their final bidding offers.Galloway said Cell One will ‘consult’ with Government to see whether the final deal meets their expectations.jo-mare@namibian.com.na