Joseph Coomson
30 June 2008
Information reaching The Chronicle indicates that global telecom giant Vodafone is close to buying a majority stake in Ghana Telecom (GT) for just over One Billion Ghana Cedis (GH¢1 billion), which is just under $1bn (£480m).
Vodafone has been in talks with the Ghanaian government about the privatisation of Ghana Telecom for several months and it was recently reported that the company is the only outside investor left in the process. An announcement that it is buying a 66.7% stake for $960m is expected by the middle of this week.
Last two weeks, the communications minister Benjamin Aggrey Ntim told the Ghanaian parliament that the government's stake will be floated on the local stockmarket.
Last year France Télécom was rumoured to have secured a 51% stake in Ghana Telecom. The government, however, pulled out of that deal at the last minute because it believed the price being offered was too low.
Meanwhile Vodafone on Monday began its arguments to fight a $2bn tax bill on its purchase of a controlling stake in Indian mobile operator Hutchison Essar, officials and news reports said.
The Bombay High Court was hearing the arguments in the case, which is being closely watched by multinationals in Europe and the US as it could set an important precedent for merger and acquisition activity in the fast-growing nation.
"The court will decide whether Vodafone owes the Indian income tax department $2bn as capital gains tax on the $11.1bn deal. It will hear arguments on the matter over the next five days," a Vodafone spokesman said.
Vodafone contends that there is no tax liability as the deal took place between Vodafone Group, registered in Holland, and a Hutchison company registered in the Cayman Islands, both outside India's jurisdiction.
This week's hearing will decide on the validity of the Vodafone writ seeking an injunction against the Indian tax authority's investigation of the deal.
The Indian government is arguing that its capital gains claim is genuine as the assets of the company in question are on Indian soil.
Vodafone bought a 67% stake in Hutchison Essar India in March last year as part of its strategy to expand in countries that have rapidly growing mobile phone markets.
India is the world's second-largest phone market after China, with more than 261mn users.
Vodafone Group Plc is the world's leading mobile telecommunications company, with a significant presence in Europe, the Middle East, Africa, Asia Pacific and the United States through the Company's subsidiary undertakings, joint ventures, associated undertakings and investments.
The Group's mobile subsidiaries operate under the brand name 'Vodafone'. In the United States the Group's associated undertaking operates as Verizon Wireless. During the last two financial years, the Group has also entered into arrangements with network operators in countries where the Group does not hold an equity stake. Under the terms of these Partner Network Agreements, the Group and its partner networks co-operate in the development and marketing of global services under dual brand logos.
At 31 March 2008, based on the registered customers of mobile telecommunications ventures in which it had ownership interests at that date, the Group had 260 million customers, excluding paging customers, calculated on a proportionate basis in accordance with the Company's percentage interest in these ventures.
The Company's ordinary shares are listed on the London Stock Exchange and the Company's American Depositary Shares ('ADSs') are listed on the New York Stock Exchange. The Company had a total market capitalisation of approximately £99 billion at 31 December 2007.
Vodafone Group Plc is a public limited company incorporated in England under registered number 1833679. Its registered office is Vodafone House, The Connection, Newbury, Berkshire, RG14 2FN, England.
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