Beirut (APD) - Celtel International, the African unit of Kuwait's Mobile Telecommunications Company (MTC), will invest $350 million annually on developing the network of Nigeria's Vmobile, the Kuwait-based Al Qabas daily reported Friday.
"We will work on making Vmobile the number-one mobile operator in Nigeria," Marten Pieters, Celtel's chief executive officer, said Thursday in a statement at the London Stock Exchange.
Celtel, which had announced Wednesday that it succeeded in acquiring a 65% stake in Vmobile for $1 billion, was able to secure $4 billion in loans and credit facilities to finance the takeover and upgrade the Vmoblie network, Pieters added.
According to Celtel, the transaction includes the purchase of 65% of the Nigerian company's existing shares and a substantial equity injection, which would boost Vmobile's ability to reach new customers.
However, Econet, a Botswana-based competitor of Celtel, challenged the acquisition on Thursday in Nigerian court. A 5% stakeholder in Vmobile, Econet argued that it had pre-emptive rights to acquire the Nigerian firm.
Celtel brushed off the viability of Econet's challenge in a first comment, quoting earlier court decisions in London which had denied Econet's claims.
Econet retorted Thursday by stating that the London court had referred the case to Nigerian courts because of technicalities and said in a press statement that the Lagos High Court set June 9 as "the hearing date for Econet's application for an injunction against the sale of a majority stake in V Mobile to Celtel."
The legal battle highlights the importance which leading emerging markets operators attribute to Nigeria's mobile telecommunications sector, where Vmobile is the second largest provider with over 5 million customers.
The Nigerian network's growth had reportedly been hampered by lack of funding.
Under new ownership, the company is expected to aggressively compete for becoming Nigeria's largest mobile operator.
According to Pieters, Vmobile would change its name and be re-branded as Celtec.
MTC had bought Celtel for $3.4 billion in March 2005. Following the acquisition by MTC, Celtel operated as a separate entity within MTC and continued to trade under the Celtel brand.
Earlie this year, MTC confirmed its bidding for Egypt's third mobile phone license. Moreover, MTC was recently quoted in media reports as being interested in Iran, India, Pakistan and Turkey as well as eyeing other African nations like Senegal, Ghana and Nigeria.
Shares of MTC traded Wednesday at KD 2.66 per share, a 0.76% above Tuesday's close. [TS]
By Mirna Sleiman, APD Staff Writer in Beirut
© APD (Arab Press Digest) 2006
