NBFIRA clears BPOPF's push for bigger Mascom stake
Mbongeni Mguni | Friday May 31, 2019 21:05
The reported approval is a blow to Strive Masiyiwa’s P3 billion bid to increase his firm’s own stake in Mascom from the current seven percent to 60%. Masiyiwa, through his Econet holding group, had planned to up his stake by buying out MTN which presently holds 53% in Mascom. The deal, MTN confirmed, was valued at US$300 million. Masiyiwa, a Zimbabwe-born billionaire, founded Mascom 21 years ago, using the fledgling company to build up a telecommunications empire spanning across the continent.
This week, insiders close to the latest developments said NBFIRA had instead approved a request by the pension fund to increase its holdings in Mascom. Under current rules, NBFIRA sets limits on how much exposure a pension fund can make in a single investment, as part of risk management protocols. The BPOPF, which has resisted the Masiyiwa/MTN deal from the time it was first announced in March, recently identified a loophole allowing the pension fund to pursue a “forced sale” of MTN shares representing 20% of Mascom. The deal, when concluded, would give the BPOPF 60% stake and control of Mascom, leaving Econet and MTN with the balance.
The insiders explained that while lawyers retained by the pension fund had explained that the BPOPF did not have pre-emptive rights to block the Econet/MTN deal, it did have the right to pursue a forced sale of the shares MTN holds in Deci. Deci is an investment vehicle which holds 60% of Mascom. BPOPF holds 67% of Deci and MTN the balance, with their relationship governed by a shareholders agreement. “MTN invested in Deci through Mobile Botswana Limited and the shareholders agreement states that if there is a change of ownership or control, the other shareholder, being BPOPF can initiate a forced sale.
“The pension fund does not want Masiyiwa as a partner and he also has said he would not be satisfied only owning 40% of Mascom. Both entities want control.
“The BPOPF wrote to NBFIRA asking for permission to increase its exposure, as part of the forced sale, and the Authority responded quickly to say go ahead.
“The deal is as good as done,” insiders told BusinessWeek. The pension fund has reportedly begun a process to independently evaluate the stake being sought after in the forced sale.
Local representatives of Econet could not be reached for comment this week, but analysts said the billionaire was not likely to take the latest developments lying down.
Masiyiwa, who enjoys a close relationship with President Mokgweetsi Masisi, told a youth gathering in Gaborone recently that he was determined to list Mascom’s shares by August this year. “The matter will likely go to court,” an analyst told BusinessWeek.
“There are issues of pre-emptive rights, some of them historical, and these can only be tested and finalised in court. “The regulators, including NBFIRA, the Competition Authority and the Botswana Communications Regulatory Authority will have to take their cue from the courts, before green-lighting anything.”
Mascom is Botswana’s biggest mobile phone provider.