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| picture courtesy of Telecel website |
After the talks of a $20 million offer for a significant slice of Telecel Zimbabwe
surfaced in January this year, we all thought this was the definitive moment in
the mobile network operator’s ownership structure.
Instead, it turned into something of a sideshow that was a display of greed
and the tough lessons that are learnt from building any business under opaque
circumstances.
Last week it was reported that Brainworks Capital, the investment
outfit that had offered to buy 40% of Telecel Zimbabwe was withdrawing its
offer. The reasons cited included the continued legal tussles that have been focused on
contesting the deal and put Brainworks under public onslaught and the failure
of the Empowerment Corporation to respond to the offer made.
Rather than an acceptance or refusal of the offer, Brainworks was instead
invited to a bidding process for the 40% share that it thought it had secured.
The inevitable happened, and Brainworks pulled out.
Now, Brainworks has made the news for
securing $35 million in capital that will be directed to bolstering of its
existing stakes in local businesses and more significantly in local telecoms.
Brainworks will, however, not be making those telecoms investments into
Telecel.
That last bit on staying away from Telecel hasn’t surprised anyone
really. Empowerment Corporation and its ownership of Telecel Zimbabwe is
one huge mess, and any investor having to untangle that just to buy into an
aggressively competitive industry would be frustrated and move away.
What has happened with Telecel and the “soft intervention” from the Ministry
of ICT ought to serve as a lesson to corporate raiders or the investors in
Telecel Zimbabwe. With Brainworks out of the picture, finding another
local investor willing to shore up an 8 figure investment for the telecoms
operator isn’t going to be easy. This creates a frustrating situation for the
mobile operator and drives away other local and international investors that
might want to buy Vimpelcom out of the remaining stake in Telecel that it
holds.
No investors mean stunted growth for Telecel which, has, in better
days, proved to be a formidable competitor to the dominance that Econet has in the industry. The Empowerment
Corporation is also left holding 40% of a mobile operator that is underperforming
and cannot attract additional investment that it (the Empowerment Corporation)
cannot raise.
For more info: www.telecel.co.zw
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