There have been fresh news doing rounds that the Ministry of ICT Postal and Courier Services has lost the Telecel Zimbabwe deal to NSSA on a technicality, which saw the latter paying $30 million on behalf of the ministry, hence they now have a say over their stake.
The Minister of ICT Postal and Courier Services Hon. Supa Mandiwanzira has said such rumors are nothing but mischievous and wishful thinking of some elements in NSSA, who are only speaking from an uninformed position but wishful desires since the contract they have is legally binding and unalterable.
The minister However accepted that they went into an agreement with NSSA as it stepped in their shoes with a loan facility which they can buy back and maintain their shares thereafter.
NSSA’s new board has long articulated a desire for direct equity participation in cash generative entities that would enable the Authority to boost its investment income and ultimately fund its benefits liabilities. An entity such as TZL,especially with its attractive entry valuation (and soft issues enabling NSSA to enhance its financial inclusion and benefits delivery capabilities), fits such investment strategy. To implement this investment strategy, NSSA’s board approved the Authority’s direct equity participation in TZL in October 2015.
Our #Intel disclosed to #MondayBlues that However government of Zimbabwe has sanctioned the Ministry of ICT via Zarnet to oversee the acquisition of the Telecel Zimbabwe Limited, (TZL) as they now doubt the capacity of NSSA to take over critical projects judging from the streak of disappointing and loss making investments they are now accustomed to.
To that effect, It is common knowledge that ZARnet, Republic of Zimbabwe (through the Ministry of ICT Postal and Courier Services) and Global Telecom Netherlands B.V (Vimpelcom) entered into a sale and purchase agreement in terms of which, against payment of the purchase price of USD$40million, ZARnet was to acquire 100% shareholding in Telecel International Limited (TIL) which, in turn, owns 60% of TZL.
It is also now common knowledge that ZARnet duly paid the agreed deposit USD$10million through CBZ leaving a balance of USD$30million.
Against the above background, the current position is that ZARnet, Government and NSSA reached an agreement in terms of which NSSA is to step in and takeover all of ZARnet’s rights and obligations under the sale and purchase agreement with Vimpelcom. Pending the finalization of such step in arrangements through a deed of motivation to be entered into with Vimpelcom.
NSSA has deposited the outstanding purchase price of USD$30million into Standard Chartered Bank local escrow account in the name of Honey & Blanckenberg as a sign of its commitment and ability to complete the share purchase transaction. On the signing of the deed of novation and completion of the sale and purchase agreement with Vimpelcom, Vimpelcom will transfer the 100% shareholding in Telecel International (TIL) to NSSA and thereby indirectly transfer the 60% controlling stake in TZL.
NSSA also reached a separate agreement but related agreement with ZARnet and Government to address ZARnet’s interests as the original purchaser that had paid the USD$10million deposit towards the 100% shareholding in TIL. ZARnet warranted to NSSA that TIL holds a convertible shareholder loan account of USD$98million in TZL. On the basis of such warranty, the parties agreed that:
Part of the legal understanding leaked by our #Intel whch NSSA may want to take advantage of reads:
(i) Within 60 days of the completion of the sale and purchase agreement as between NSSA and Vimpelcom, ZARnet would have the option to purchase the 100% shareholding in TIL (the sale shares) from NSSA for an Option Fee equivalent to USD$30million plus all the costs, taxes and charges incurred by NSSA in acquiring the sale shares and in transferring them to ZARnet. The exercise of the Option is entirely dependent upon ZARnet proving the USD$98million loan account,
(ii) Upon exercise of the Option by ZARnet, NSSA would then purchase the convertible USD$98million loan account from TIL for USD$45million which would be offset against the Option Fee with NSSA settling any difference. NSSA will then convert the USD$98million loan account into direct equity in TZL and ZARnet would then effectively be a diluted co-shareholder in TZL.
In summary therefore, the import of the two agreements that NSSA has reached with ZARnet and Government is that NSSA will effectively end up with a substantial equity in TZL in line with its Board approved investment strategy.
This is where the rumors is emanating from but the minister of ICTPS has rest assured that they will remain in charge and complete the whole process without glitches as it is in government interest to own and run the profitable entity for the good of the nation.