* Deal involves merger of three Nigerian telecom firms
* Aims to create national broadband internet firm
* Deal requires shareholders' and regulatory nod
(Adds details, background)
LAGOS, Oct 31 Nigeria's Starcomms
has agreed a $210 million investment deal with investor group
Capcom Limited for a 90.5 percent stake in the telecom business,
the stock exchange said on Wednesday.
Under the deal, Capcom, an investment vehicle with offices
in Lagos, will merge the assets of privately-held telecom firms
MTS and Multi-links with Starcomms, Nigeria's only listed
telecoms company, and provide $98 million to finance their
Capcom aims to create a national broadband internet company
out of the merger. Starcomms is the only telecoms company in
Nigeria that is listed on the local bourse.
Nigeria's telecom regulator told Reuters this month that
three of its CDMA mobile operators - Starcomms, Multi-links and
MTS - were seeking approvals to merge.
CDMA mobile operators like Starcomms have been hard hit from
increasing competition in recent years in Africa's biggest
telecom market, causing these firms to lose market share to
rival GSM operators.
South Africa's MTN, India's Airtel and
Emirate's Etisalat account for around 95 percent of
the local market.
"The proposal from Capcom will enable Starcomms to reduce
its high level of borrowings and improve its low liquidity
position," Starcomms chief executive, Olusola Oladokun said.
"Given the significant challenges the business has faced
over the last two years, Capcom's investment will facilitate a
The deal still needs a nod from Starcomms shareholders and
regulatory approval by the Securities and Exchange Commission.
(Reporting by Chijioke Ohuocha; Editing by Tim Cocks)