10 November 2017

Namibia: Cran Blocks MTC Shares Sale

THE Communications Regulatory Authority of Namibia this week blocked a plan by government to buy 34% of mobile telecommunications giant MTC in a deal worth over N$3 billion.

Government already owns 66% of MTC through Namibia Post and Telecommunications Holdings (NPTH), while 34% belongs to Portugal Telecom.

Cabinet last year approved a plan for NPTH to buy Portugal Telecom's 34% shareholding, worth over N$3 billion, using money from the Government Institutions Pension Fund (GIPF).

With the purchase, MTC would become wholly state-owned for a while, but NPTH needed to get permission from Cran to go ahead with the acquisition.

Officials in the information ministry briefed about this matter told The Namibian that the Cran board this week blocked the NPTH application, partly because of concerns about the future ownership of NPTH.

The officials declined to be named because of the sensitivity of the matter.

Government intends closing down NPTH by next February, which has created uncertainty over MTC's ownership when the holding company is dismantled.

An official familiar with discussions at NPTH said some Cran officials believed that the way the current share purchase proposal is structured creates room for "outright corruption".

"The board rejected the application. They want to transfer the shares to NPTH, dismantle the holding company and then sell the shares to whoever they want," the source said, adding that the unwinding of NPTH could lead to keeping the identities of whoever bought the MTC shares secret.

"It is too risky, considering the [NPTH] closure they are planning to make," said the official.

There are two scenarios on what might happen with the 34% MTC stake should government acquire it.

One scenario is that the state will look for a private technical partner, which is seen by sources as a way to bring in well-connected Namibians under the mantle of local empowerment.

The other scenario is that government will buy the shares and list some on the Namibia Stock Exchange (NSX), allowing any investor to become an MTC shareholder.

Although some people have said scenario two would benefit a broad range of investors, such an option could still be open to manipulation by those with access to the stock exchange.

It is unclear why government wants to use N$3 billion of GIPF money to buy shares in MTC when the shares could be bought by another private company, which would continue to run the telecommunications company that is the crown jewel of government-owned businesses.

There is a silent background scramble for control of MTC ownership. Some politicians are accused of trying to cripple MTC, while others are believed to be plotting how to benefit from the MTC shares once they are parked in NPTH.

Sources indicate that the MTC stake has already been dangled in front of investors from Nigeria, Angola and Britain.

Cran spokesperson Katrina Sikena did not respond to questions yesterday, but acknowledged receiving them.

NPTH chairperson Ally Angula also declined to comment on the matter.


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