The Namibian Competition Commission (NaCC) will meet next week to decide whether or not to approve the transfer of MTC shares from Portugal Telecom to the new European shareholder, Samba Luxco.
“The matter is up for a decision at the next board meeting next week and we cannot talk about approval now,” NaCC spokesperson Dina Gowases told New Era upon enquiry this week.
Portugal Telecom that owned 34 percent of MTC through its African subsidiary Africatel swapped its shares with Samba Luxco in June to settle a boardroom squabble. The shareholding is worth in excess of N$1,13 billion, according to independent evaluation documentations tabled in late 2014.
Questions have also been raised about how the swapping of shareholding will affect MTC’s technical capacity, questions that the telecommunications firm skirted when approached for comment.
Asked to clarify the issue, MTC managing director Miguel Geraldes said Africatel submitted all information on the asset swap in the “correct timeframe”, thus “complying with the Shareholders’ Agreement, the Article of Association and the Namibian Companies Act. Because of the aforementioned, Africatel remains in consultation with the Namibian parties to receive the above consent.”
Geraldes did not address the question of the technical support that MTC received from Portugal Telecom, which as a large integrated telecommunication company had “the power to set and control financial and operating policies” of MTC, according to Shareholders’ Agreement documents seen by New Era.
Geraldes was asked to shed light on whether the departure of Portugal Telecom and the transfer of its shares to Samba Luxco means that MTC no longer has access to the technical support that Portugal Telecom provided, because Samba Luxco as a private equity investor has no capacity to provide similar technical support.
Geraldes, however, advised that caution be exercised “when advancing scenarios that could generate confusion within the Namibian telecommunication industry, particularly the employees of MTC, as well the relationship with the very significant Namibian population.”
He referred to the notice to market that Oi, the parent company of Portugal Telecom, issued in June, announcing the swapping of assets with Samba Luxco.
The statement does not say much though, besides announcing the agreement to swap assets. The finalisation of the settlement and share exchange agreement are still “subject to necessary regulatory and anti-trust approvals being obtained”.
The share exchange agreement was reached to settle a dispute that arose after Portugal Telecom’s new Brazilian parent company, Oi, started selling its assets to pay its debts and moved to sell Portugal Telecom assets.
Samba Luxco held 25 percent in Africatel through Helios and notified Oi that it cannot sell Africatel, because of a standing shareholder agreement that obliged Oi, as majority shareholder, to buy out Samba Luxco’s shares at an agreed price before selling off the entire portfolio and risking the possibility of not making enough profit for other shareholders in Africatel.
While Samba took the matter for international arbitration, Oi directors came up with what they considered the best option for a settlement. They gave to Samba the crown jewels in Africatel, MTC shares. In return Samba would cut its Africatel shareholdings from 25 to 14 percent.