MTN announced it plans to sell its 20% associate stake in Belgacom International Carrier Services SA (BICS) to Proximus Group for R1 billion (€100 million). The Proximus Group is the largest telecommunications company in Belgium, headquartered in Brussels.
In 2009, BICS and MTN announced the next step in their strategic co-operation by combining their international carrier services, resulting in MTN holding an equity stake in BICS. At the time, the current shareholders of BICS were Belgacom and Swisscom.
In terms of the transaction, MTN contributed to BICS the assets of MTN ICS, its international wholesale subsidiary, which generated revenues of €223 million for the year ending 31 Dec 2008. Also, Africa’s biggest mobile phone operator mandated BICS to operate as the official international gateway for its global carrier services.
BCS is headquarters in Brussels with regional offices in Bern, Madrid, Dubai, New York, San Francisco and Singapore, a satellite office in Beijing and local representation in Accra, Miami, Montevideo, Nairobi and Toronto.
Today, MTN announced that it has concluded an agreement to sell, and thereby fully exit, its 20% shareholding in BICS. BICS is a leader in the international carrier market with a proven track record.
The completion of the deal is subject to customary regulatory approvals.
“Once all the conditions precedent have been fulfilled, MTN will receive proceeds of approximately €100 million1 (R1,8 billion) in cash, which the group intends to use to pay down US dollar debt and for general corporate purposes,” MTN informed investors on Tuesday.
MTN will record a profit on disposal amounting to approximately R1,2 billion during the first half of 2021, mainly due to the foreign currency translation reserve release.
“This results in a net impact of R812 million over the two periods.”
The company said the sale represents further progress in its stated asset realisation programme (ARP), aiming to reduce debt, simplify its portfolio, reduce risk, improve returns and unlock value.
Proximus Group strategy
In view of the ambitioned simplification in BICS’ shareholding structure, Proximus has reached an agreement with MTN and Swisscom, the two minority shareholders of BICS, on the acquisition of their respective stakes of 20% and 22.4% in BICS for a total cash consideration of €217 million.
Last summer, Proximus communicated to the market that the shareholders of BICS were exploring a potential sale of 51% of the company’s shares. After the investigation of different options, Proximus said it has concluded that the best way to have the necessary flexibility to create long-term value for BICS and TeleSign was to acquire 100% ownership of BICS.
“From a financial point of view, this acquisition allows Proximus to combine the robust free cash flow generation of BICS with the attractive revenue growth of TeleSign,” Proximus said in a statement.
“Going forward Proximus will execute the growth plan of BICS and TeleSign, through a combination of organic investments in key growth domains, a strict focus on cashflow generation within the legacy business and an active role in capturing consolidation opportunities.
“At the same time, MTN and Swisscom will remain important commercial partners of BICS. The combination of the above creates a strong perspective of sustainable value creation for the Proximus shareholders.”