South African government prepares to sell mobile stake

The South African government hopes to raise around a billion dollars by selling most of its stake in mobile operator M-Cell.

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By  Alex Marklew Published  June 4, 2001

The South African government has confirmed it is to sell off most of its stake in mobile operator M-Cell and has already started looking for bidders.

The government currently owns 24% of M-Cell through transport group Transnet, worth just over a billion US dollars. 20% is expected to be sold once a suitable bidder is found.

“The disposal of Transnet’s stake in M-Cell is an important part of the government’s ongoing programme of restructuring state-owned assets and of encouraging the development of a strong South African telecoms industry,” said a spokesman.

The government is expecting to raise about $2.25 billion through re-structuring over the next 12 months. Much of this will come from telecoms, with an IPO for PTT Telekom planned by the end of this year.

Experts have welcomed the sell-offs as a way of raising cash for the country.

“It’s good news that we are going to see the sale of M-Cell,” said Colen Garrow, an analyst at ABN Amro, “It’s going to make the government’s debt numbers, in particular, very attractive.

“It is good to see that the momentum is being maintained, this is what the market wants to see.”

The South African mobile business is still in a state of confusion as legal wranglings over the allocation of a new mobile license continue. Saudi-owned Cell-C won the right to operate a third network 18 months ago, but bidders who missed out later challenged the decision in court.

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