THE National Social Security Authority, which is desperate to shore up its reputation after years of making questionable investments, is confident that it will take up a 60 percent stake in mobile telecommunications company Telecel.The statutory body coughed up more than US$40 million to fund the acquisition of a 60 percent shareholding in Telecel held by Dutch-telecommunications firm VimpelCom through its subsidiary, Global Telecom Holding.
Although ZARNet, the State Internet service provider, was the lead agent in the deal, it courted NSSA to provide the funding.
The deal has also been stalled by present challenges in effecting telegraphic transfers to offshore destinations. Initially, Telecel wanted NSSA to finance the transaction and negotiate terms through which the money would be repaid, but the prospects of controlling a cash-rich business that has potential to deliver a decent return on investment has become irresistible for the social security authority.
As the two entities were working at cross purposes, this led to a tussle for the Telecel stake. This, it appears, has now been resolved. The Sunday Mail Business gathered last week that an agreement has been thrashed out between NSSA and ZARNet’s legal advisor — the Attorney-General’s Office — for the former to assume Telecel’s stake upon conclusion of the deal.
NSSA board chair Mr Robin Vela confirmed the development.
“The true position on this is clearly stated in a Transfer of Rights and Interest Agreement signed between NSSA and ZARNet. Such agreement makes it clear that NSSA, from the signature date, assumes all the rights and interests of ZARNet in their transaction with VimpleCom, and is to receive the 100 percent of the shares acquired by ZARNet in Telecel International Limited (which in turn, holds a 60 percentshareholding in Telecel Zimbabwe (Limited) immediately on completion of the share purchase transaction.
“Both ZARNet and its legal advisor, the Attorney-General, have committed to honouring the agreement in writing to NSSA …” said Mr Vela.
The agreement has a clause allowing ZARNet to buy back the interest from NSSA within 60 days of wrapping up the deal. NSSA’s intended acquisition of a stake in Telecel is part of the authority’s broader investment diversification strategy.
The investment in Telecel will represent a break from the past where NSSA funds were in some cases haemorrhaged through dubious investments. Recently, NSSA launched the National Building Society to leverage on burgeoning activity in property development.
According to Mr Vela, the growing use and profitability of mobile banking services would greatly benefit pensioners around the country.
“The intended investment will also provide NSSA with a broad communications platform that will facilitate more efficient communications and data capturing which are essential in the discharging the authority’s main mandate of administering pensioners’ funds,” said Mr Vela.
Telecel is involved in the mobile money business through its TeleCash platform. Market rumours suggest that NSSA was interested in buying the remaining 40 percent that is presently held by the Empowerment Corporation.
But NSSA and the EC’s legal advisor Mr Gerald Mlotshwa dismissed the possibility of such a deal.
EC is a made up of interests of local investors such as Telecel chair Dr James Makamba ( Kirstel Corporation), Dr Jane Mutasa (Selphon Investments), Integrated Engineering Group, Magamba eChimurenga, National Miners Association and the Zimbabwe Farmers Union.