GIPF confirms discussions to acquire MTC

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Desie Heita

Windhoek-The Government Institutions Pension Fund (GIPF) has confirmed that it has been approached with an offer to purchase a percentage of the equity in the country’s mobile telecommunication company, MTC, and that formal discussions to that effect have started.

The country’s largest investor and guardian of Namibia’s largest pension fund, nevertheless, cautioned that it would first have to do its due diligence before it makes a decision on investing in MTC and on the level of investment it would make.
“We had a formal approach from NPTH (Namibia Post and Telecommunications Holdings), that is the holding company of MTC. Yes, they did approach us. The discussions are at an early stage,”

GIPF chief executive officer David Nuyoma confirmed to New Era this week.
“We are looking at it with keen interest indeed,” he said.

GIPF now sits with N$98 billion in accumulated pension funds, having achieved a rare growth rate of 8 percent in the previous year, when virtually every fund in the market registered lower growth and some recorded negative growth.

Already in December last year Cabinet approved that NPTH proceed with the proposed acquisition of 34 percent shares in MTC, once the terms and conditions set out by the lender, specifically mentioning GIPF as one of the key lenders, along with other financial institutions are agreed upon.

The 34 percent stake in MTC currently in the hands of European-based investment funds and equity firms, was conservatively valued at between N$2 billion and N$2,5 billion in 2013, but the value has undoubtedly gone up since then.

Finance Minister Calle Schlettwein has also on record motivated that GIPF purchase MTC shares as a strategic investment. He said: “MTC is a well-managed and profitable company and therefore it is a good investment for GIPF, if they so wish”.

“We are happy we are being considered. We have to do due diligence though, if we are to go ahead with the investment in MTC,” said Nuyoma this week.
Nuyoma, however, noted that GIPF has not been yet formally approached with regard to the planned privatisation of TransNamib.

Both the finance and public enterprises ministries have singled out TransNamib as one of the state-owned entities that urgently needs to be reformed to attract investment and improve efficiency.

GIPF is again one of the players being eyed for this specific deal, as a vehicle in which the public can have equity participation and inject some of its pension funds in the local economy.

But Nuyoma says at this stage they simply do not know much about what is happening at TransNamib.

“With MTC at least there are published results, but with TransNamib there is nothing on revenue and assets and we do not know if [investing there] will give us comfort. Pensioners will want to see value for their investments. We have to make a return that is market-related,” he explained.

“They are going through a major transition from what I am reading in the newspapers. So, perhaps one has to see what comes out of that exercise,” Nuyoma added.

NPTH is one of the government’s investment arms and holds a 76 percent equity stake in MTC. Samba Luxco holds 34 percent of MTC shares, after it swapped its assets with Portugal Telecom – which owned Africatel – in June last year. The swapping of assets was to settle a boardroom dispute between two foreign shareholders.

In December, government cautioned that while it had authorised the purchase of MTC shares, it “reserves the right to retain ownership of the full 100 percent of MTC until further approval by Cabinet”.

NPTH was supposed to close shop this year, but the winding up process has been postponed until the Bill to do so has been passed by the legislature. Until the Bill is passed the assets of NPTH, including its shares in MTC, cannot be re-allocated or dismantled.

“What that means is that because NPTH was established by law and because it has some properties and assets we, therefore, need to come with a law to dismantle it, so that the re-allocation of assets under its jurisdiction will be determined by the law and will be legislated,” Information Minister Tjekero Tweya explained when he made the announcement in March.

Cabinetlast month approved the draft Namibia Post and Telecommunication Holdings Dismantling Bill that would result in NPTH subsidiaries, Telecom and NamPost, becoming independent state-owned enterprises.

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