Millicom signs agreement to acquire Zanzibar Telecom
Stockholm, June 5, 2015 – Millicom
(Stockholmsbörsen: MIC), 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.
Ends
Press
Enquiries
Tabitha Aldrich-Smith, Interim
Communications Director
Tel: +44 7971
919610/ press@millicom.com
Investor Relations
Nicolas Didio, Director, Head of
Investor Relations
Tel: +352 277 59125 (Luxembourg) /
+44 203 249 2220 / investors@millicom.com
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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