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15.04.2007 General News

Government offloads Westel Shares

By myjoyonline

The government has released two-thirds of its total stake in Western Telesystems (WESTEL) Company Limited to Kinz Telecom as its strategic partner for a total fee of $250 million.

The government has further proposed to float 20 percent of its remaining shares in the company to the general public through the Ghana Stock Exchange (GSE) before the close of the year to enable Ghanaians to become part owners of the company.

An agreement to that effect was sealed on Thursday with Kinz Telecom, a United Arab Emirates (UAE) company, to pave the way for more competition in the telecommunications sector in the country, particularly with regard to fixed line services.

The agreement was signed by the Minister of Communications, Professor Mike Oquaye, and witnessed by his deputy, Dr Benjamin Aggrey Ntim, on behalf of the government, while Dr Salieh El Hassan, the Chairman of Kinz International Group, initialed for his company and witnessed by Nana Ato Martinson, the Chairman of Kinz Telecom Ghana.

The initial bid offer advertised by the transactional advisors, Databank Financial Services and the National Trust Holding Company (NTHC), acting on behalf of the government, was $65 million but Kinz Telecom emerged the favourite among African Sot Limited of Ghana/US, AfriTel Communications (Ghana) Limited, National Telecom Cards Company of Egypt and Business Acceleration Group of South Africa after it offered to pay $95 million for the company.

However, as a result of some further calculations and additional services, particularly the transfer of full ownership of the international gateway license among other issues, the bid price rose at the final negotiations last Thursday to $250 million. It also includes a debt of $25 million owed by WESTEL to the sector regulator, the National Communications Authority (NCA).

The company will however be required to pay an additional ¢13 million to the NCA to cover the cost of the mobile license released to WESTEL.

By the agreement, Kinz Telecom is coming in at a time when there is no competition in the fixed line service, with the state-owned Ghana Telecommunications Company (Ghana Telecom) having a monopoly.

Alongside its GSM service, the company will operate the CDMA technology and also build an E-Marine submarine cable laying unit, which builds fibre optic networks and manufactures telephone smart cards.

In an exclusive interview in Accra on Friday, Mr Tara Al Hamri, the Director of Sales and Marketing of Kinz Telecom Ghana Limited, said, "We offered to pay the money because of the absolute confidence we have in the future and the leadership of the country."

He said the company had done all its underground work and was ready to launch itself onto the market, in spite of the competition, adding that "competition is an added value. However, we are not here to compete but to help the country to improve its teledensity rate from the present 20 percent per annum to 50 percent per annum by 2010".

Mr Uamri said the company was in partnership with world acclaimed companies from the United States of America, China and the UAE to deploy state-of-the-art technology in its quest to provide its potential customers with the best quality service.

He said the company intended to invest about $500 million in the telecom industry in the form of equipment and cash to enable it to meet the challenges ahead.

Culled from Daily Graphic

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