Celtel completes privatisation process for WESTEL
Celtel completes privatisation process for WESTEL Website
Government has officially welcomed Celtel International BV, as a new market entrant into the telecom sector after it paid USD115 million to the government, signifying the termination of the privatisation process of Western Telesystems Limited (WESTEL). The receipt of Celtel's payment, represents transaction payment of its shareholding in WESTEL and concludes the Sales and Purchase Agreement (SPA), a statement issued by the Ministry of Information and National Orientation said on Monday. The statement, signed by Ms. Oboshie Sai-Cofie, the Minister, said this left a balance of five million US dollars subject to the completion of due diligence by the time of assumption of the company by Celtel. It said the transfer of Western Wireless International (WWI)'s 66.67 per cent shares to the Government of Ghana in 2005 and the need to secure strategic investment to re-position WESTEL as a significant telecommunications service provider in the country necessitated its privatisation. The statement recalled an earlier statement issued on October 24, 2007, informing the public about the conclusion of negotiations for the divestiture of WESTEL stating that, a price offer of USD 120 million had been agreed for 75 per cent shareholding, following extensive negotiations. It said this reduced to 70 per cent within three years, when Celtel would release five per cent of its shares in addition to those to be released by the government and floated on the Ghana Stock Exchange to benefit the Ghanaian public. Under the agreement, a USD 25 million due to the National Communications Authority and payable over an 11-year period of the licence's lifespan was reduced to USD15 million, and paid outright as part of the offer price of USD 120 million. The outright payment is actually a deal struck to save government some money. It was also made clear that Kinz Telecom, as the highest bidder for WESTEL, was not able to fulfil its undertaking to make payment within an agreed stipulated period, hence, the government invited Celtel as the next successful bidder into the negotiations. The statement said the privatisation exercise for Ghana Telecom was still in progress and that offers received so far had not met the expectation of government.