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UPDATE 1-Nigeria's Starcomms gets $210 mln from investment group
October 31, 2012 / 5:46 PM / 5 years ago

UPDATE 1-Nigeria's Starcomms gets $210 mln from investment group

* 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 (Reuters) - 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 integration.

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 strategic turnaround.”

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)

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