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MTC waits in the wings for Nigerian opportunity

Bankers representing Econet Wireless are expected in Nigeria before the end of April to conduct a due-diligence exercise on the operator in order to assess its fair value.

While reports last week suggesting that Kuwait’s MTC Group had acquired a 65% stake in Nigerian mobile operator V-Mobile were denied by the operator, it is understood that MTC, in cooperation with its African subsidiary Celtel International, has received guarantees of equity participation should Econet Wireless be unable to finance the increase of its current 5% stake.

Earlier this year, existing V-Mobile shareholders were offered the right of first refusal to acquire a majority stake in the operator before shareholding could be offered to interested third-party investors, of which MTC is said to be the most serious.

It is hoped the sale of the company to one or more of the existing shareholders would resolve an ongoing shareholder dispute that has paralysed V-Mobile’s efforts to attract investment from external sources. Founding shareholder Econet Wireless Nigeria has challenged the sale of any part of the company to third parties, resulting in the withdrawal of South African operator Vodacom from becoming majority shareholder back in 2004.

Bankers representing Econet Wireless are expected in Nigeria before the end of April to conduct a due-diligence exercise on the operator in order to assess its fair value. Celtel, in the meantime, is one of the bidders for one of the three GSM licences offered in Nigeria in 2001, but pulled out when the bidding reached US$280 million. The Nigerian mobile market has gone on to become one of the most robust in Africa after the South African market, and Celtel has long-since expressed an interest to find a way of entering the West African state.

When Vodacom offered to acquire a 51% controlling stake in V-Mobile in 2004, the South African operator was believed to have offered around US$1 billion, including the redemption of debt and funds to be put towards capital expenditure.

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