Four foreign firms fight over NetOne
NetOne, the Zimbabwean mobile network operator, is reported to have four foreign companies battling it out to acquire a 45-50% stake in the company.
According to reports by the Zimbabwe Independent, the companies include US-funded Lebanese consortium, a South African telecoms giant, a UAE-based company and group of investors in the diaspora.
NetOne has been hit with a number of financial problems as of late, largely owing to legacy debts that are owed to statutory bodies and foreign suppliers like Chinese vendor Huawei, which supplies equipment to NetOne.
However, sources close to the deal say that investors have shown a willingness to clean up NetOne’s balance sheet and invest fresh capital into the state-run telco.
One of the bids says: “the investor seeks to buy NetOne at a fair price using the conventional valuation comparable. The government of Zimbabwe will be looking to price in a control premium. We envisage that the deal will be able to put an offer that will be acceptable to all parties, based on fair valuation of the business.”
In return, the Zimbabwe Independent says that the Reserve Bank of Zimbabwe will issue the required pre-approvals to the investor to allow for the repatriation of invested capital and future dividends from Zimbabwe.
In addition to its financial woes, NetOne is also reported to have affected by a number of corporate governance and corruption issues. Earlier this month, the company’s CEO, Lazarus Muchenje, was suspended for alleged gross misconduct related to the handling of expired contracts for nine senior managers. The scandal was so big that the Information and Communication Technology, Supa Mandiwanzira, had to intervene.
NetOne is the smallest of the three licensed mobile network operators in the country to Econet, which the largest, followed by Telecel which the has a controlling stake in. In the past and under former president Robert Mugabe, all previous bids from investors to acquire or partner NetOne was blocked. This includes MTN which had both its 2010 and late 90’s bid rejected. In 1999 Telecel Zimbabwe attempted a merger with NetOne which was also declined.