Tanzania — The Tanzania Telecommunications Company Limited (TTCL) and Celtel Tanzania Limited are now legally, financially and operationally totally separate companies.
This follows an agreement signed between the Government of Tanzania and Celtel International on August 5th whereby the shareholders agreed to the restructuring of both entities.
Under the terms of the agreement, the Government and Celtel International will maintain their current ownership in TTCL at 65% and 35%, respectively.
However, the shareholding with regards to Celtel Tanzania has changed. The government has retained 40% of its shares and the balance of 60% is held by Celtel International. This structure was enabled following the Government's USD 28 million sale of 25% of its original shareholding to Celtel International.
The Government proceeds of USD 28 million from the sale of its 25% stake in Celtel Tanzania have been made available to TTCL in the form of a loan from the Government.
Celtel Tanzania's spin off from TTCL allows the former subsidiary to immediately access a USD 25 million loan arranged by Celtel International. The total investment in the two newly separated companies amounts to USD 53 million.
As a part of the agreement, a USD 82 million shareholder loan from TTCL to Celtel Tanzania has been partly converted into equity. The balance, USD 42 million, will be repaid by Celtel Tanzania to TTCL during the coming six months.
The separation of the two companies has altered both their management structures. The Government has majority representation on the TTCL Board while Celtel International, which will continue to run the mobile operation, has similar standing on the Celtel Tanzania Board.
TTCL will in future be run by a new private management firm. A Government tender has been issued to this effect.
Speaking after the signing ceremony, Omari Issa, Chief Operating Officer for Celtel International and Chairman of Celtel Tanzania said "I believe this is a positive and progressive move for the telecommunications industry in Tanzania. The new structure will allow each organization the freedom to concentrate on their core businesses and play their respective roles in developing telecommunications throughout the country."
TTCL is expected to focus solely on providing a strong telecommunications backbone infrastructure and broadband data solutions for the country, while Celtel will focus on its core business of cellular telephony.
