MTN’s planned sale of its majority stake in Botswana’s Mascom has been met with concern by the operator’s board.
Last week, MTN agreed to sell its stake in the joint venture for $300 million to its partner Econet Wireless. However, Mascom’s board believes that another stakeholder – the Botswana Public Officers Pension Fund (BPOPF) – must be able to influence the decision.
Following a portfolio review, MTN has adopted a new strategy that will see it reduce the number of markets in which it operates. The group owns a 53.1% stake in Mascom, which is the market leader in Botswana, with over 1.5 million subscribers giving it a market share of around 54%.
Econet Wireless is owned by Mascom’s founder Strive Masiyiwa, who set up the operator in 1998 but has sold off the majority of his holding in it. Mascom’s board is now dominated by representatives of the BPOPF, with the operator among the fund’s most profitable enterprises.
Local news outlet Mmegi reported that the Mascom board’s BPOPF representatives had dismissed MTN’s offer, claiming that the fund should receive the first right to buy any available holdings in the operator. The fund’s representatives queried the valuation of the stake, arguing that due diligence would be required before any transfer of shares began.
Quoting anonymous sources, Mmegi claimed: “Masiyiwa apparently wants to come back to significant equity through purchasing MTN’s shares.” This has been met with resistance by the board, with another source noting: “The pension fund is well capable of making an offer for those shares and if they cannot, they could find partners. At worse, they could even list those shares.”
MTN is looking to divest units that are “not cash flow positive”, according to CEO Rob Shuter. The group has sold its operations in Cyprus but has not yet divested any other holdings, although Bloomberg reported that it was considering selling up in Guinea, Guinea-Bissau and Liberia.
