Millicom has purchased an 85 per cent stake in Zanzibar Telecom (Zantel) from Etisalat Group
Under the terms of the share purchase agreement, which was signed this week, the Swedish company acquired the controlling stake in Zanzibar’s leading telecoms provider for the sum of US$1, while also agreeing to take on Zantel’s US$74mn debt obligations.
Millicom said Zantel will have US$32mn in net current liabilities at closing, although the deal remains subject to the approval of the Tanzanian Communications Regulatory Authority and the Fair Competition Commission.
In addition, Millicom has secured a US$100mn, five-year credit agreement for Zantel, which it expects to reach an EBITDA (earnings before interest, taxes, depreciation, and amortization) of US$25mn with the addition of a range of new products and services, along with efficiency savings.
Zantel has 1.7mn subscribers and approximately five per cent of the Tanzanian mobile market, recording gross revenues of US$82mn in 2014.
The company operates 2G and 3G services over 545 network sites, with 57MHz of spectrum and has ownership rights to undersea fibre optic cable capacity.
