Regulator gives nod to Vodafone Ghana sale

Vodafone is finally selling out of Ghana, the country’s telecoms regulator having given the green light to a revised deal that will see Telecel Group pick up its majority stake in Vodafone Ghana.

The deal has been some time coming, not that either party has shared a lot of information along the way.

Ghana’s National Communications Authority (NCA) revealed this week that it has given its conditional approval to the transfer of Vodafone’s 70%  stake in Vodafone Ghana to Telecel Group, the pair having made a series of concessions to get the deal over the regulatory line.

The regulator was not particularly forthcoming about exactly what the parties had offered in order to meet its requirements, something they apparently failed to do 12 months ago. According to the NCA, Vodafone Ghana submitted an application for the transfer of the bulk of its shares to Telecel in January last year, but following an evaluation process it “concluded that the request did not meet the regulatory threshold for approval to be granted.”

The companies appear to have begun the regulatory process before formally inking a deal though. The final deal between Vodafone and Telecel emerged last summer, the companies signing an agreement for an undisclosed sum and, despite reports to the contrary in the local press, the regulator said it would not necessarily block the proposed transaction.

The pair resubmitted a revised financial and technical proposal in December, the regulator notes. The new proposal “demonstrated the needed capital investment to extend the deployment of 4G and launch innovative Fintech solutions,” it said, adding that in general it provided more clarity in terms of the funding required for the transaction and various commitments from buyer and seller. Telecel has also strengthened its overall governance and management team, and made firm commitments to meeting the NCA’s regulatory requirements, it added.

It seems then that the regulator had doubts about allowing Telecel into the market; the company styles itself as a provider of mobile and enterprise services, a digital platform, and a supporter of start-ups in Africa, but isn’t particularly forthcoming about what its activities actually entail, in many cases.

It also seems that a commitment to invest in mobile networks in the country may have helped to tip the balance. When it announced the deal last summer, Telecel said it would spend US$500 million in the first three years “to expand and refinance Vodafone’s network across the country.”

The mention of the funding required for the transaction is also a key point. Back in July, Bloomberg quoted unnamed sources as saying that Telecel would help fund the Vodafone acquisition with the sale of its mobile towers in Ghana. We don’t know whether that suggestion irked the NCA, but Telecel quickly clarified that it had no such plan.

“The acquisition is fully financed by Telecel Group and its partners. Telecel confirms that the potential sale of Vodafone Ghana Towers is not part of the acquisition funding,” it said.

We can never say never when it comes to telco tower sales, of course. But for now, Telecel is keeping them. And it looks like keeping Vodafone Ghana staff was also a consideration for the NCA.

“Based on the above, the NCA confirms that the revised proposal from the Buyer now meets the regulatory threshold and hence has granted a conditional approval for the transfer of shares to the Buyer including submission of strategies for employee retention,” the regulator said.

Vodafone has been present in Ghana for almost 15 years. It paid $900 million for its 70 percent stake in what was then known as Ghana Telecommunications Company in mid-2008, the remainder of the telco’s shares staying with the state. But the exit is now looming. There are still regulatory ‘i’s to dot and ‘t’s to cross, but the NCA looks to be broadly in favour of this deal.

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