Aga Khan development fund to buy Seacom cable for $603m
An international development agency run by the Aga Khan has applied for regulatory permission to buy 100% of Seacom, the subsea cable that links the east coast of Africa to India and Egypt.
The Aga Khan Fund for Economic Development (Akfed) has applied to the Competition Commission of the Common Market for Eastern and Southern Africa (Comesa) for approval to buy the cable and the company that owns it for the equivalent of US$603 million.
Seacom owns the entire east African portion of the system, which went into service in 2009, and two fibre pairs between Egypt and India.
Tata Communications owns two fibre pairs from Egypt to India and a branch to Jeddah, which the company runs under the name TGN-Eurasia. Earlier this year Seacom and Tata Communications said they were partnering to offer high-speed connectivity between Africa, Europe and Asia to meet the growing demand in these regions.
According to the Comesa Competition Commission, a joint regulator for Comesa member states, Akfed will buy the shares through its subsidiaries, Industrial Promotion Services (IPS) and Jubilee Holdings.
The Competition Commission has asked for comments by this Friday, 31 July.
Akfed is already a shareholder in Seacom and it said it wants to fully enter the very high speed market which has experienced strong growth in Africa with the coronavirus crisis.
Comesa says it is conducting an investigation into the Akfed acquisition offer. It will determine whether the transaction is likely to prevent or lessen competition significantly and harm the public interest.
The Aga Khan, Prince Shah Karim al-Husseini, the hereditary leader of the Nizari Ismailis grouping in Islam, runs Akfed as a network of affiliates with more than 90 separate project companies employing over 47,000 people, often in parts of the world that lack sufficient foreign direct investment. Its revenues last year were $4.5 billion.
Apart from Seacom, in which it is already a shareholder, its interests include a number of mobile phone operations, including Roshan in Afghanistan, Indigo in Tajikistan, both in central Asia, east Africa’s and Smart in Tanzania, Uganda and Burundi.Akfed subsidiary IPS Cable Holdings is registered in Mauritius, as is Seacom.
Last year Seacom said it was working with Raxio Data Centre to launch a carrier-neutral, enterprise-grade data centre in Uganda. Earlier in 2019 it bought FibreCo Telecommunications, a South African open access dark fibre network,
The Seacom cable, 15,000km long, runs from Zafarana in Egypt and Mumbai in India, connecting Jeddah, Saudi Arabia, and Djibouti, and terminates in Mtunzini in South Africa, also landing at Mombasa, Kenya; Dar es Salaam, Tanzania; and Maputo, Mozambique.