Wesbank

Mascom ownership wars: Econet Wireless suffers a big blow

SHARE   |   Monday, 03 April 2017   |   By Zimditvnews
Strigve Masiyiwa Strigve Masiyiwa

Fast growing mobile Econet Wireless’ plans to raise $50 million by selling its remaining 7% stake in Botswana’s Mascom has been blocked for what insiders believe are selfish reasons. Information gathered by this publication shows that the mobile conglomerate offered to sell its shares to the Botswana Public Officers Pension Fund (BPOPF) but the deal was rejected by the pension’s chief executive officer Boitumelo Molefe. BPOPF is the second largest shareholder in Mascom after South African based MTN mobile network. Mascom is owned by Zimbabwean born mobile entrepreneur Strive Masiyiwa and has been operating in the country for more than a decade. Investigation by this publications shows that Molefe blocked the sale saying that the offer being offered by for the shares was “too expensive”. “Surprisingly she has endorsed a new deal where MTN will purchase the BPOPF’s share in Mascom. Sources close to the deal said that Econet’s offer had valued Mascom around P7.7 billion, while the BPOPF had valued the company at P5billion. MTN purchased 60% of Mascom in 2007 but a complex holding structure has prevented if from taking over management of the company. Currently management of Mascom is outsourced from Portuguese Telecoms through a lucrative management contract.


MTN has been frustrated by the Portuguese telecom arrangement as it wants to rebrand Mascom to MTN Botswana. “It also wants to integrate Mascom into its Africa network, although it wants the Botswana operations to be owned via its Dubai investment company,” says a source. “MTN expects to take over management of Mascom and rebrand to MTN Botswana this year. “The venture partners, a Botswana investment company, which previously managed the BPOPF’s investment in MTN and also chaired the Mascom board, has negotiated behind closed doors a deal with BPOPF. “The commission relates to the price which MTN will pay.” Information available says that while the deal has been sanctioned by BPOPF management, but internal politics may derail the transaction. “But Molefe does not have the support of the Board of Trustees for the transaction and chances are very high that her favoured MTN may end up being a frustrated shareholder”. “If BPOPF management pull off the deal, it is likely that the value of Mascom (or the rebranded MTN Botswana) will rise and boost the value of Econet’s shareholding. “Econet’s challenge is going to find a new buyer for its shares, although with MTN in charge of Mascom, Econet is likely over time to unlock the value of its shares.” [zimditvnews]