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By Goddy Egene and Emma Okonji

Starcomms Wednesday announced that it had accepted and concluded the $210 million investment deal offer from Capcom.

Meanwhile, Starcomms Plc and IHS Plc, two companies listed in the telecommunications sub-sector of the Nigerian Stock Exchange (NSE) Wednesday made announcements that would raise investors’ expectations for  a brighter future for their investments.

Capcom had in July this year announced that  it was investing in a merger of three Code Division Multiple Access (CDMA) operators, which involves Starcomms, but the telecoms firm had said it was an ongoing process that was yet to be concluded then.

Announcing the conclusion of the deal, Starcomms said it was ready to rollout services on the Long Term Evolution (LTE) technology.

The deal will provide Starcomms with a capital investment of cash and assets independently valued at $210 million.

As part of the agreement, Capcom has agreed to cause the contribution to Starcomms of certain CDMA assets over which it intends to acquire control in separate but related transactions.

Capcom will contribute to Starcomms assets including the spectrum licence of MTS and the CDMA mobile telecoms business of Multi-Links.

In addition to facilitating the CDMA consolidation, Capcom will provide $98 million in cash to finance the post-acquisition integration of these assets, to meet an ongoing short-term losses in the business and to deliver the combined company’s new business plan.

In return for its investment into Starcomms, Capcom said it would receive new Starcomms shares which will result in Capcom owning 90.5 per cent of Starcomms restructured issued share capital.

In consideration of their proposed sales of certain assets to Capcom, both Helios Towers Mauritius Holdings Limited and Asset Management Corporation of Nigeria (AMCON) will own stakes in Starcomms, together representing less than 12 per cent of Capcom’s equity following Capcom’s investment derived from Capcom’s shareholding on completion.

The proposed transaction is expected to create a leading CDMA operator in Nigeria and represents a fundamental step as part of the consolidation move in the Nigerian telecoms industry.

With the benefit of the 20 MHz of contiguous 1900MHz spectrum to be held by the consolidated operations, the largest spectrum allocation for any mobile operator in Nigeria, Starcomms will be at the forefront of the shift away from current generation of services into LTE technology platform capable of delivering new 4G and related data and other services that will offer customers substantially improved performance.

Monetising the new broadband services and applications will provide Starcomms with crucial first mover advantage in the Nigerian market with its 4G/LTE network rollout, the new investors said.

Starcomms had before now, faced severe operational and financial challenges on account of the shifting competitive landscape in Nigeria’s telecommunications industry.

The recent challenges have resulted in the company operating with an unsustainably high level of debt and a stagnating operating performance.

While Starcomms said it had reached an agreement with Capcom Limited to provide Starcomms with a capital investment of cash and assets worth $210m, IHS, which is, a leading telecommunications infrastructure provider, announced that  Wendel, one of the Europe’s leading investment firms, is acquiring a $125 million equity stake in  the company.

The  investment translates into 25 per cent equity stake in IHS Plc was purchased by Wendel’s subsidiary, Oranje-Nassau Development. The investment is part of a larger fundraising for IHS’ Pan-African growth with solid participation from current and new shareholders.

In a notification to NSE yesterday,  Starcomms said as part of the agreement, Capcom had agreed to contribute to Starcomms of certain CDMA assets over which it intends to acquire control in separate but related transactions including the spectrum licence of MTS and the CDMA mobile telecoms business of Multi-Links.

In addition, Capcom will provide $98 million in cash to finance the integration of these assets, to meet on-going short-term losses in the business and to deliver the combined Company’s new business plan.

In return for its investment into Starcomms, Capcom will receive new Starcomms shares which will result in Capcom owning 90.5 per cent of Starcomms restructured share capital.

As part of the overall transaction with Capcom, both Helios Investment Partners and Asset Management Corporation  of Nigeria (AMCON)will acquire equity stakes in Starcomms derived from the Capcom shareholding on completion.

The proposed transaction will create a leading CDMA operator in Nigeria and represents a fundamental step as part of the consolidation move in the Nigerian telecoms industry. With the benefit of the 20 MHz of contiguous 1900MHz spectrum to be held by the consolidated operations, the largest spectrum allocation for any mobile operator in Nigeria, the new entity is positioning itself at the forefront of the shift away from current generation of services into a Long Term Environment (LTE) technology platform capable of delivering new 4G and related data and other services that will offer customers substantially improved performance.