allAfrica.com: Nigeria: The Starcomms Stocks Challenge And Expectations of the Telecom Industry (Page 1 of 1)

Nigeria: The Starcomms Stocks Challenge And Expectations of the Telecom Industry

IT was the most unlikely telecommunications company in Nigeria expected to get listed on the Nigerian Stock Exchange, but listed it did last Monday and in the process made history as the first company in highly lucrative sector.

Starcomms Plc, Nigeria's fourth largest telecommunications by last Monday's listing of its 6, 878, 478, 096 ordinary shares of 50 Kobo at N13.56K breasted the tape ahead of more robust GSM mobile operators - MTN Nigeria, Celtel Nigeria and Globacom - to become the first telecom operator to be listed on the Exchange.

Before Monday's listing on the floor of the Nigerian Stock Exchange, Starcomms Plc had successfully raised N64.35 billion through a private placement offer. The private placement beefed up the company capital base. However two institutional investor Actis, and Emerging Capital Partners LLC, (ECP) divested some of their holdings from the company thus widening the shareholder base.

The shares of the company which were listed at 12.27 p.m made significant gain immediately, as it went up five per cent after only five minutes of listing/trading to close at N14.33k.

Reacting to the development Mr. Maher Qubain, Chief Executive Officer said: "At Starcomms, we do not just cook up figures. We operate as a transparent company and today's history making event is meant to drive our growth. We want to become the 3rd, if not 2nd biggest telecom operator in Nigeria by 2010. This is a promise, and at Starcomms, we keep our promise".

The historic listing presents an excellent opportunity for every Nigerian to buy into one of the fastest growing and profitable sectors of the telecom sub-sector of the Nigerian economy.

Chief Maan Lababid, chairman of the company said: "I am very pleased with the outcome of the private placement. Investors have shown that they believe in the future of Starcomms and in the management team in place led by our CEO, Mr. Qubain,. With Actis and ECP, we have grown the business into a world class, well managed national telecom operator and a market leader. I look forward to the next exciting phase of development for the company, as we grow in size to serve even more Nigerians as we get listed in the Nigerian Stock Exchange today."

Mr. Qubain, briefing stock brokers on the company's performance sheet, stated: "Starcomms now controls 3 per cent of the Nigerian telecom market. We also have 37 per cent of the fixed wireless sector. By the end of 2008, we would have reached a subscriber base level of 2.5 million. That is our target. Our current subscribers base is approximately 1.6 million by end of June 2008. I make bold to state that at Starcomms, we deliver on our promise".

Simon Harford, CEO, Actis, West Africa while commenting on the successful private placement which culminated in the public listing of the company's shares said: "We are very pleased to have had the opportunity to be involved with such a dynamic and growing business as Starcomms. Actis's partnership with Chief Lababidi, the management team, ECP and the Board has meant we have been able to contribute to the growth of the company and the development of the business into a market leader in an exciting and competitive market. The successful closing of the private placement is testament to the very positive investor sentiment and interest in this country."

Navaid Burmey, Managing Director, ECP has this to say: "We are proud to have worked with Starcomms and Actis while the company expanded its regional footprint, developed new services and generated top corporate business accounts. The proceeds from the private placement will enable the company to expand its product range and network thereby bringing more telecom choices to Nigerians nationwide. Now, as the company achieves its landmark listing, we hope to watch its growth accelerate as a publicly-owned company. ECP is very pleased that Starcomms has emerged as the first company to list on the Nigerian Stock Exchange."

Reverend Olu Odejimi, Chief Executive, Clearview Securities and doyen of the Brokers praised the courage of the Starcomms management team to get listed on the Stock Exchange. "We had expected the big mobile operators to seek capital market investment. We are still waiting for them to come, but until they come, Starcomms Plc is the number one telecom company in Nigeria because they are the first to come here,"

Mr. Binos Yaroe, General Manager/ Head, Quotations & Listings, the NSE said the listing by Starcomms was a signal of better fortunes for the company. "Starcomms Plc has proved what prudent management means to a company. The listing of their stocks today marks a milestone in the annals of the company's history, and also of the Nigerian Stock Exchange as it becomes the very first telecommunications company to be listed on the floor of the exchange."

In the coming months, industry watchers believe there would be more activities from the sector towards the exchange. Already, MTN Nigeria concluded its private placement in 2007. Another CDMA operator, Reltelewireless is also believed to be making moves towards getting listed on the stock exchange.

For an economy sub-sector that is seen as most active in Nigeria, telecommunications stock will be highly sought after by investors whenever they go public. Starcomms has just opened the windows for a new market evolution. Its private placement and listing on the floor of stock exchange were handled by Chapel Hill Advisory Partners Limited and IBTC Asset Management Company Ltd.

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