Millicom Signs Agreement to Acquire Zanzibar Telecom
June 05 2015 - 2:12AM
Business Wire
Millicom (STO:MIC) (NASDAQ:MICC), today announced that it has
signed a Share Purchase Agreement to acquire an 85% stake in
Zanzibar Telecom (Zantel) from Etisalat Group.
Zantel is the leading mobile telecom operator on the islands of
Zanzibar with 2014 gross revenues of $82 million and 1.7 million
subscribers across Zanzibar and mainland Tanzania. It operates 2G
and 3G services over 545 network sites, with 57MHz of
spectrum(1) and has ownership rights to undersea fibre optic
cable capacity. Zantel has an approximate 5% share of the Tanzania
mobile market(2). Millicom intends to retain and continue to
operate the Zantel brand, while delivering cash flow growth by
leveraging technical and operational efficiencies.
Under the terms of the agreement Millicom will pay the total
cash consideration of $1 dollar and assume total debt obligations
of $74 million. In addition Zantel will have up to $32 million in
net current liabilities at closing. Millicom expects the EBITDA of
Zantel to reach $25 million through a combination of bringing new
products and services to the existing customer base and delivering
greater efficiencies. The agreement allows for an adjustment to the
total consideration if that target is not reached by the end of
2019.
Millicom has arranged with a leading international bank, the
provision of a $100 million 5-year credit facility for Zantel.
The Government of Zanzibar will continue to own the remaining
15% of the shares in Zantel. Millicom is looking forward to working
with the Government of Zanzibar as a partner and as a shareholder
to continue to develop the exciting opportunities for Zantel and
its customers.
Tanzania is Millicom’s biggest market in Africa and the
acquisition of Zantel is a natural fit for Millicom’s strategy,
strengthening our overall position in Tanzania and delivering
further growth prospects for the Group:
· further leveraging the brand power of Zantel
· delivering technical synergies including procurement and
national roaming
· improving network service quality and coverage
· capitalising on the growing demand for mobile data and roll
out of 4G coverage
· accessing further bandwidth capacity via the undersea fibre
optic cable EASSy
· sharing Millicom best practice such as expanding its Mobile
Financial Services in Zanzibar to support financial inclusion
The transaction remains subject to regulatory approval by the
Tanzanian Communications Regulatory Authority and the Fair
Competition Commission.
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(1) Zantel has 850MHz, 900MHz, 1800MHz and 2100MHz spectrum for
Zanzibar and mainland Tanzania
(2) Source: Tanzania Communications Regulatory Authority,
December 2014
About Millicom
Millicom is a leading telecommunications and media company
dedicated to emerging markets in Latin America and Africa. Millicom
sets the pace when it comes to providing innovative and
customer-centric digital lifestyle services to the world’s emerging
markets. The Millicom Group employs more than 16,000 people and
provides mobile, cable and satellite services to over 56 million
customers. Founded in 1990, Millicom International Cellular SA is
listed on NASDAQ OMX Stockholm under the symbol MIC. In 2014,
Millicom generated revenue of $6.4 billion and EBITDA of $2.1
billion.
During its Q1 results in April, Millicom announced that its
Africa operations delivered a revenue growth of 16%, up from 13% in
the last quarter. In Tanzania Millicom reported strong customer
growth in mobile (+508,000) delivering revenue growth of 18% to $92
million with an EBITDA margin of 36%. LTE has also recently begun
roll out in Tanzania. Following this transaction, Millicom will
reinforce its market position in Tanzania.
About Zantel
Zantel (Zanzibar Telecom) is the leading data telecommunications
brand in Zanzibar and its largest internet provider. Its integrated
telecom service provide International Gateway services, Fixed,
Mobile and data services through its CDMA, GSM, 3G networks.
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MillicomPress EnquiriesTabitha Aldrich-SmithInterim
Communications DirectorTel: +44 7971
919610press@millicom.comorInvestor RelationsNicolas Didio,
DirectorHead of Investor RelationsTel: +352 277 59125 (Luxembourg)
/ +44 203 249 2220investors@millicom.com
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