Zimbabwean mobile network, Telecel may face having its mobile license revoked if it doesn’t sell a majority of its shares to local shareholders.
Communications and Infrastructural Development Minister Nicholas Goche told the state-owned newspaper, The Herald that Telecel’s mobile phone licence would not be renewed until it had addressed what he called its “shareholding anomaly”.
At the same time, if the license is renewed, it will be at a higher rate of US$137 million. The license expires next month.
The company’s Egyptian parent, Orascom Telecom owns a 60% stake in the company. The remaining 40 percent of Telecel is owned by a holding company controlled by President Robert Mugabe’s nephew, Leo Mugabe.
Telecel is required to offer a further 20% to local shareholders to bring its foreign shareholding down to 40%.
The sale of the Zimbabwean stake would resolve the foreign shareholder compliance, but it also reduces the likely value of the company as the pool of potential buyers is reduced to just Zimbabwean investors. That the stake has to be sold within the next few weeks would also put pressure on the owners to sell at a discount just to secure a deal.
Zimbabwe’s Indigenization and Economic Empowerment Act aims to transfer at least 51 percent control of all foreign-owned firms, including mines and banks, to locals.