Publications
Partners
Barely six- hours after Celtel announced that it had bought a 65% controlling stake in V-mobile, Econet - a 5% shareholder in V-mobile - is repudiated the transaction adding yet another twist to one of Nigeria's long standing boardroom feuds.
Econet CE Strive Masiyiwa claims that Celtel's deal was in breach of a V-mobile shareholder agreement.
According to Masiyiwa the shareholder agreement grants Econet- a 5% shareholder in V-mobile the pre-emptive right to up its stake in from 5% to 51%.
Following Econet's failure to exercise its pre-emptive right by the close of business last week Friday, Celtel announced earlier this morning that it was proceeding to buy a 65% stake in V-Mobile.
The deal - Celtel's biggest ever and valued at US$1bn will expand the company's footprint to 15 African countries.
It has been operating in 14 African countries, including Sudan, Tanzania, Uganda, Zambia, Burkina Faso, the Democratic Republic of Congo, Kenya, Chad and Gabon.
Masiyiwa contended that Econet had successfully raised $960m in loans from syndicated banks and $546m in equity from equity funds but the selling shareholders in V Mobile had refused to provide transaction documents required for successful completion, including details of the escrow accounts for payment of the money.
"For whatever reasons, there has been a deliberate attempt by the selling parties to frustrate Econet's attempts to exercise its pre-emptive right.
"Our lawyers stationed in Lagos for the past two weeks have tried but in vain to acquire the necessary documents required to conclude this transaction."
Masiyiwa explained that Econet was forced to seek legal redress in the UK courts to have the documents released. However, the UK court that initially issued an injunction to stop the transaction later discharged the injunction and referred the matter to a Nigerian court because of a technicality over jurisdiction.
Econet has since filed an urgent application to the Nigerian courts for an order to force the Nigerian shareholders to release the documents required to complete the purchase.
Renowned for his litigious tendencies, Masiyiwa said he was prepared for another long battle.
"I dare to warn Celtel that others have walked that route before and fell along the way," said Masiyiwa in a derisive reference to Vodacom's failed bid to acquire V-mobile.
"When the matter comes to the courts we shall win on merit because there are straight forward that anybody wishing to buy V-mobile should follow. If Celtel proceeds to buy disputed shares, they must know that they are holding them in trust, as those are Econet's shares," warned Masiyiwa.
