Privately owned pan-African telecoms group Liquid Telecom and investment firm Royal Bafokeng Holdings (RBH) have agreed to buy Neotel from India’s Tata Communications for R6.55 billion, to create the largest pan-African broadband network. By Staff Writer
Liquid Telecom is a privately owned pan-African telecoms group, majority owned by Econet Global.
The deal, which is subject to regulatory approvals, is transformative and will create the largest pan-African broadband network. Through a single access point, businesses across Africa will be able to access 40 000kms of cross-border, metro and access fibre networks. These currently span 12 countries from South Africa to Kenya, with further expansion planned.
The transaction comes after few months of Vodacom walking away from buying Neotel. In March, Vodacom officially dropped its R7 billion bid for Neotel following the Pretoria High Court’s ruling that Icasa’s approval of the transfer of Neotel’s operating and spectrum licences to Vodacom be set aside in its entirety.
“Leveraging the strengths of Liquid Telecom, RBH and Neotel, we will offer an unprecedented fibre network with a unique set of services and international connectivity for telecom operators and enterprises across sub-Saharan Africa,” Nic Rudnick, Liquid Telecom CEO, said.
“For the first time, African companies will be able to connect with each other in a cost effective and reliable way, all on a single fibre network. We will also be increasing investments into Neotel to cater for rapidly accelerating mobile and enterprise traffic, enabling us to launch exciting new products and services.”
Launched in 2006 to compete with Telkom, Neotel owns a lucrative 800MHz spectrum, which is at the heart of concerns raised about the pending Vodacom-Neotel deal.
“This transaction is part of our diversification strategy and its focus on infrastructure is in line with our objective to invest in high growth sectors. As a long term investor, we are pleased to be partnering with Liquid Telecom who has a very credible track record in rolling out fibre in challenging and diverse markets,” Albertinah Kekana, Royal Bafokeng Holdings CEO said.
“This deal represents our long-term investment approach and our commitment to the African growth story.”
Tata Communications and minority shareholders led by Nexus Connexion (Nexus) have agreed for Liquid Telecom to acquire Neotel for R6.55 billion. Liquid Telecom is partnering with Royal Bafokeng Holdings (RBH), a South African investment group, which has committed to take a 30% equity stake in Neotel.
The transaction is subject to approval by South African regulatory authorities and is expected to be completed later this year. Liquid Telecom was advised by The Standard Bank of South Africa Limited (lead advisor, mandated lead arranger and global coordinator) and UBS.
Nexus’ Kennedy Memani, said: “It will see the sale of Neotel to new shareholders who have the vision, expertise and funding to continue to grow the company and to allow it to reach its full potential in South Africa and across the African Continent. We are confident that customers and employees will benefit from the transaction and from the resulting stability and business expansion.”