The Government has shed off 75 per cent stake in Western Telesystems (Ghana) Limited, worth $120 million.
Celtel International, a subsidiary of Kuwaiti company Zain (formally called MTC) in a sale and purchase agreement. The Government thus now holds 25 per cent stake in the company through the Ghana National Petroleum Corporation.
A statement issued and signed by the Minister of Communications, Dr Benjamin Aggrey Ntim, said Celtel's shares would reduce to 70 per cent within three years when the company would list five per cent of the shares on the Ghana Stock Exchange as per the agreement.
“The offer price of $120 million includes an additional consideration of $15 million outright payment to cover the penalty fee of $25 million due to the National Communications Authority (NCA), an amount which would have been paid over an eleven-year period of the licence's lifespan,” it said.
The statement said Celtel would be investing millions in a state-of-the art telecommunications network and associated services to offer unparalleled experience as a pan-African operator, bring telecommunications service to more than 24 million customers in 14 countries across the continent.
Celtel operates the One Network, the world's borderless network, which offers customers opportunity to move freely across geographical borders using the same service they would access in their home country and to make calls without roaming surcharges and without having to pay to receive incoming calls and messages.
According to the statement, the service also permits customers to buy and top up with local airtime when they visit other countries in which One Network is operational.
Celtel's One Network service is currently being operated in six countries across East and Central Africa with about 160 subscriptions, the statement said.
It would be recalled that the a conclusion of a settlement agreement between the government and Western Wireless International (WWI) saw the transfer of 66.67 per cent shares of WWI to the government.
Consequently in March 2006, the government charged the Ministry of Communications to facilitate the divestiture of Westel in an open and transparent manner.
Giving a background to the process that led to the selection of Celtel International, the statement said a ministerial committee was constituted which included the Ministries of Communications, Finance and Economic Planning, representatives from the Ghana National Petroleum Company and Westel to select a transaction advisor.
It said NTHC and Databank were accordingly selected as the Transaction Advisors to undertake the privatisation of Westel through a competitive process.
The statement said by the close of the submission of bids and after consideration of the technical evaluation, six international firms, namely Celtel, Kinz Telecom, Vodacom, African Soft Ltd, National Telecom Cards Company and Afritel Communications were short-listed.
It said in accordance with the terms of reference for the request of proposals the transaction advisors recommended the top four bidders for negotiations with government.
The statement said Vodacom, however, withdrew its bid before the official negotiations could begin.
It said the government invited Kinz Telecom as it had offered the superior price, to seek firm commitments on technology, details or roll-out, implementation as well as possibility of price enhancement by the company.
The statement explained that Kinz Telecom accepted to pay $250 million for 66.7 per cent shares of Westel for consideration of additional spectrum request by Kinz Third Generation Network licence and Wimax frequencies.
It said a memorandum of understanding was signed for payment to be executed within 45 days before the conclusion of a sales and purchase agreement.
It said Kinz Telecom was not able to fulfil its undertaking and consequently, the exclusivity granted to it was withdrawn, where upon the government invited Celtel as the next successful bidder for negotiations over its bid.
The statement noted that the amount offered by Celtel was considerable lower than the Kinz Telecom's price, but principally, that was due to the limited frequencies being offered to Celtel.
“Celtel also looks forward to promoting Ghana as the gateway to West Africa through its One Network”, it stated.
From The Business Desk