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Essar Group in talks with UAE firm for Africa telecom deal

Essar Group in talks with UAE firm for Africa telecom deal
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First Published: Sun, Jul 19 2009. 09 27 PM IST
Updated: Sun, Jul 19 2009. 09 27 PM IST
Mumbai: The $17 billion (around Rs82,800 crore) Essar Group led by the Ruia brothers—Shashi and Ravi—on Sunday announced that it had entered exclusive discussions with the UAE-based Dhabi Group to invest in the latter’s portfolio of African telecommunication assets.
The transaction will involve an equity infusion into these businesses as growth capital and will be the basis of a partnership to create a significant presence in Africa, a press statement issued on Sunday said.
Standard Chartered Plc. is the exclusive financial adviser to the Dhabi Group. The group and its chairman, Sheikh Nahayan Mabarak Al Nahayan, lead a consortium of investors. It has diversified business interests with a focus on emerging market opportunities in financial services, telecommunications and real estate, the statement added.
The Essar Group’s interest in telecom is well known with its prime asset in India being its 33% interest in Vodafone Essar Ltd, which is a joint venture with Vodafone Group Plc. Vodafone Essar is one of India’s largest cellular service providers with 75 million subscribers.
The Essar Group declined to share details on the quantum of investment it plans to make in the proposed venture.
According to the website of Dhabi Group, it has invested in two companies, Warid Telecom Uganda Ltd of Uganda and Warid Congo SA of the Republic of Congo. The website claims that, over the next three years, Warid of Uganda has committed to that country’s government that it will increase its network capacity to four million global system for mobile (GSM) network customers and 300,000 WiMax customers. GSM and WiMax are telecom technology standards.
It is also committed to deploying a state-of-art nationwide fiber optic backbone to network the whole country.
The total capital expenditure of these networks will be in excess of $500 million, the website says.
Warid Congo has already launched a network and has received approval to increase its size to 580,000 customers. After its completion Warid Congo will become the largest mobile telecom network in the country.
A senior executive with Essar Group said his company is looking at picking up a stake in the telecom assets of Dhabi Group in Africa in line with its strategy to boost its presence in that continent. “Africa is the emerging market. Almost all Essar Group companies have presence in Africa,” added the executive, who didn’t want to be identified.
pr.sanjai@livemint.com
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First Published: Sun, Jul 19 2009. 09 27 PM IST
More Topics: Telecom | Essar | Africa | Expansion | Standard Charted |