The Zimbabwean government is set to acquire the entire shareholding of Telecel Zimbabwe, the country’s third largest mobile operator, Information Communication Technology Minister Supa Mandiwanzira said Wednesday.
The minister told parliament that government did not have enough resources to purchase stakes from the two shareholders and had instead asked a state entity to take over the transaction.
Russian telecoms giant Vimplecom which owns 60 percent shareholding in Telecel and local consortium Empowerment Corporation which owns the remaining 40 percent had both offered to sell their stakes in the business to government, the minister said.
“Government has no enough resources to finance that kind of transaction and government has many companies that it owns 100 percent and it has requested one of these entities to pursue this transaction on a commercial sense,” he said.
The minister explained that government blocked Vimplecom from disposing the 60 percent stake to a foreign investor to allow government to benefit from the business whose foreign shareholding had exchanged hands twice since establishment without government benefiting from capital gains tax.
“The Zimbabwe authorities decided that they cannot let the shares trade outside the country without the country benefiting from issues of capital gains tax,” the minister said.
The move to acquire the firm comes at a time when Telecel won a court reprieve in May against the cancellation of its operating license by the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ).
POTRAZ had cancelled the license citing the company’s failure to regularize its shareholding in compliance with local ownership laws that require majority shareholding by locals in foreign businesses.
Telecel Zimbabwe was established in 1998 to operate as a mobile phone network, and currently has more than 2 million subscribers in a market where there are two other operators, one of which is owned by government. Enditem