Happiness Zengeni in Amsterdam, NETHERLANDS
Telecel Zimbabwe’s majority shareholder Vimpelcom says it is committed to maintaining its shareholding in the mobile network operator and is already implementing a turnaround strategy.
Disposal of the 60 percent shareholding could only be considered on an arm’s length basis and upon concrete conviction since the company sees Zimbabwe as a market full of growth potential once the macro-economic conditions begin to recover.
Chief group business development and portfolio officer Mr Anton Kudryashov told Zimbabwe journalists in Amsterdam, Netherlands, yesterday that it will continue to look at the available options for the stake although the company has gone ahead to implement a turnaround strategy.
He admitted to the group being in negotiations for the disposal of the stake since last year and was still open to the option.
“We were approached by potential buyers towards the end of last year. Some of the offers were attractive reflecting the potential of the business. We were in advanced negotiations with another buyer. However, we could not complete this process due to Government interference.
“Because we require a number of approvals from Government for the transaction such as Potraz approval, we could not proceed with the disposal.
“Since then there were reports that Government through Zarnet was interested in acquiring the stake.
“The discussions on that are ongoing. We are now looking for proof that Zarnet has funding for the transaction. ”
He said as far as they are concerned no decision has been made and nothing has been signed yet.
He said Vimpelcom, however, continues to keep its commitment to Telecel which had been impacted negatively by the news of its licence cancellation and is now implementing a widespread turnaround process for the operations.
“Since March when the public pronouncements started, we have had to re-look at the business. We have drawn significant resources towards Telecel . . . drawing from technical expertise within the Vimpelcom group.
“The first signs of the turnaround are now showing as there is an improvement in the customer base, quality of network and cash flows.”
He said Telecel’s performance had improved in spite of the dip in the first half.
“The company is doing better than previously. The first six months performance was primarily due to external forces. However, we continue paying licence fees and these are being accepted that’s why we have been focusing on turning around the business.”
Telecel was doing work on collecting its debts, addressing costs and coming up with innovative ideas. Telecel chief executive Angeline Vere said the mobile operator was now on firm footing after implementation of the turnaround plan started.
This was showing through the restoration of the MFS platform and improvements in the distribution channel.
Mr Kudryashov said Telecel has been honouring its licence obligations.
“We continue paying our licence fees, with the latest payment of $5 million paid in June while the next payment is due in December.”
The group has paid 30 percent of the requirement. According to the agreement, Telecel will complete paying for its $137 million licence fees in 2018.
He added that the group was preparing to file for arbitration against Government for violating the Bilateral of Investment Promotion and Protection Agreement with Switzerland and Netherlands.
“We sent letters to the relevant authorities in April informing them that we are starting the six months cooling off period after which papers will be filed at the International Centre for Settlement of Investment Disputes in October unless the issue is resolved before that period.
“The solution would be the restoration of the licence. The issue is also before the Russian government after it was raised during President Mugabe’s visit in May.”
Mr Kudryashov said if Vimpelcom, whose revenue was at $19 billion last year, has an opportunity to grow Telecel without interference from Government the top-line at the operations would grow between 10-15 percent per year.
“Our hands have been tied. We feel like we are not welcome in the country. And for such an isolated asset in Africa (when the bulk of the assets are in Europe and Asia) we have to be pragmatic as well about our options.”