29 November 2012

Deal gives Telecom Namibia a key foothold in the GSM operator business

Telecom Namibia on Wednesday closed the acquisition of Powercom (Pty) Ltd t/a Leo, Namibia’s second mobile operator.

The Sale of Shares Agreement was entered into between Telecom Namibia and Guinea Fowl Investments Two (Pty) Ltd, Powercom (Pty) Ltd, Investec Bank Ltd and Nedbank Ltd on 2 March 2012, followed by the Sale of Shares reinstatement and amending agreement said by the above parties on 13 November 2012. The transaction which sought to transfer control of Powercom t/a Leo to Telecom Namibia was duly approved by the Communication Regulatory Authority of Namibia (CRAN) on 11 October 2012. The transaction was already approved by the Namibia Competition Commission (NaCC) on 27 April this year. At a special ceremony held in Windhoek on 28 November 2012, Telecom Namibia paid the purchase consideration of N$2.00 to Guinea Fowl Investments Two (Pty) Ltd in respect of the acquisition of 100% equity interests in Powercom (Pty) Ltd. The acquisition gave Telecom Namibia a key foothold in the GSM operator market and created an important opportunity for the company to pursue its fixed-mobile convergence strategy. The purchase consideration of N$2.00, which is the amount which is paid by Telecom Namibia to the sellers of Powercom (Pty) Ltd, is the repayment of debt in Leo amounting to N$180 million. Of this amount, N$60 million was transferred upon signature of the Sale of Shares Agreement, while an amount of N$120 million is repayable over a three year period.

Importance of the Acquisition

Welcoming the deal on Wednesday, Information and Communication Technology Minister Joel Kaapanda said:” As shareholder, the Government is happy that the deal that was approved by Cabinet is finally concluded. The way we value this acquisition is not based on just the net tangible assets. We value this deal based on what we think eventually it will be worth.”Hon. Kaapanda said that the local mobile industry was still developing and that there was huge growth potential. Telecom’s Board Chairman Joseph Iita said the acquisition was “an exciting step forward” in support of the strategic intent of our company to go GSM.

The Minister further said that the acquisition of GSM network assets will be beneficial to strengthening the overall operation efficiency of Telecom Namibia's mobile service, providing a better customer service, sustainable growth, competitiveness and innovation into the future.” “We envision Leo’s takeover as a rosy garden of straightforward synergies thanks to a set of complementary network technologies, spectrum positions and operations,” Iita said. He said Leo was a critical resource for Telecom Namibia in the company’s quest to remain competitive and deliver shareholder value, adding that it was good for competition and innovation, especially in the mobile arena.

28 November 2012

Telecom Namibia today announced that the Communication Regulatory Authority of Namibia (CRAN) has formally cleared the Company’s completed acquisition of Powercom (Pty) Ltd, trade name Leo, the country’s second mobile operator. The transaction was already approved by the Namibia Competition Commission (NaCC) on 27 April this year.

CRAN’s approval marks the final approval required for Telecom Namibia’s overall transaction with Guinea Fowl Investments Two (Pty) Ltd to acquire 100% equity stake in Powercom (Pty) Ltd T/A Leo, effectively placing the Company under the full control of Telecom Namibia.

Commenting on the development, Frans Ndoroma, MD of Telecom Namibia, said; “This is a milestone achievement for Telecom Namibia and it undoubtedly positions TN as a fully-fledged ICT service provider. We are indeed pleased to welcome Powercom (Pty) Ltd t/a Leo customers and staff to the Telecom Namibia family.”

Ndoroma said that Telecom Namibia’s acquisition of Powercom (Pty) Ltd T/A Leo will see mobile users across the country benefiting from increased investment in even better mobile services and new technology in the future. “Our immediate focus from today will be on improving services, products, marketing, and network coverage to meet the needs of the Namibian market,” he said.

“With Powercom (Pty) Ltd T/A Leo as part of the Telecom Namibia Group, it will serve as an active platform to introduce innovative fixed-mobile convergence (FMC) services and using the all-powerful Telecom Namibia infrastructure for backhauling and transport capability,” the MD added.

“I thank our shareholder for the confidence they placed in us, as well as our Minister of ICT, Hon. Joel Kaapnda for his unwavering support to us. I would like to extend my gratitude to the Board of Directors of Telecom Namibia, the management team as well as our employees and Union Executive who supported TN during the bidding for this acquisition. Last but not least, I thank Mr. Stanley Similo, in his capacity as Acting CEO, who managed to steer the company forward with all employees onboard, during these turbulent times

Telecom Namibia’s Chief Strategy Officer Theo Klein will assume the role of Interim Chief Executive Officer at Leo with immediate effect. He will report to the Board of Directors of the Company.

"I am very pleased to join Powercom (Pty) Ltd T/A Leo at this decisive moment in its development. The opportunities at the newly acquired entity are both exciting and challenging. Together with the Company's solid management team and employees, we are looking forward to further establishing a strong platform and infrastructure that will enable us to deliver new products that compliment Telecom Namibia's existing services," said Klein.

The acquisition of Powercom (Pty) Ltd T/A Leo represents a unique opportunity to gain full management control of a mobile business with growth potential. Telecom Namibia is committed to accelerating the growth of Powercom (Pty) Ltd T/A Leo and increasing its share in the dynamic Namibian mobile market. This represents a great opportunity that will allow us to fully integrate the new acquisition to the Telecom Namibia family and take advantage of Group synergies and jointly becoming a stronger player in the market.

In addition, this transaction delivers significant customer, shareholder and public benefits that are available at this level only from the combination of these two companies with complementary network technologies and operations. Telecom Namibia is confident in its ability to execute a seamless integration, and with additional spectrum and network capabilities, the Company can better face competition, build for the future and help meet customers’ demands for FMC services.

Telecom Namibia has awarded the 2012 Paralympic Gold and Silver Medalist, Johanna Benson with a laptop and a 24-month free broadband Speedlink connection, valued at N$25 000 for her brilliant exploits at the London Games.

Head of Marketing Amanda Hauuanga said the Telecom Namibia gift would enable the sprinting sensation“to keep in touch with families, friends and fans around the world.”

Benson was attending a Telecom-sponsoredNamibian Businesswomen Projects’ year-end breakfast held in Windhoek on 9 November.

Oiva Angula, Telecom’s Senior Manager of Corporate Communications & Public Relations, extended the company’s congratulations to the athlete who was the guest of honour at the event.

“This gives me the opportunity, on behalf of Telecom Namibia, to extend hearty congratulations to Johanna, Namibia’s first ever Paralympic gold medallist, for her success in London. Your gold- and silver-medal performances are amazing, a testament to your the hard work and dedication as an athlete. We all are so proud. Well done,” Angula said.

“Women not only in Namibia but the world over, because of the challenges they confront, are trailblazers, instinctual innovators and they are energetic entrepreneurs if exposed to an opportunity. You know that; many are here in this room. Their drive and their ideas must be recognised and realised, but they must be given the resources to do this and take it to scale,” he added.

He said Telecom Namibia was proud to be the main sponsor of the Namibian Businesswomen Projects. “Research and experience have shown that educating women is among the most effective ways of improving a country’s overall wellbeing, and beneficiaries of various programmes of the Namibian Businesswomen Projects are energetically playing their part in the boardrooms of their companies and other spheres of our national lives,” Angula said.

“We at Telecom Namibia do not believe that a company has to choose between being a successful business and a responsible one. We have a model for making a difference that works. When we combine the Telecom Namibia model with women’s empowerment, we have an incredible opportunity to make a difference on the big challenges facing our country today.”

Angula said gender equity and women empowerment have been the missing links in the human development value chain for too long.

“What is needed is the enhancing of women’s financial inclusion, building enabling environments for women to thrive as entrepreneurs as well as to create opportunities for women to participate in commerce through inclusive and transparent procurement chains,” he stressed.

Angula called upon Namibian businesswomen to participate fully in Telecom Namibia tendering process to grow their businesses, adding: “We are eager to increase women share on the Telecom Namibia account, in addition to making philanthropic giving toward women’s economic empowerment projects.

“Helping more women live better is a defining issue for Telecom Namibia and our country. We are stepping up our efforts to help educate, source from and open opportunities for women around the country. We want women to view us as a company that is relevant to them and cares about them. We want them to be leading suppliers, managers and loyal customers,” he said.