Monday, June 22, 2009

Econet Blocks Sale of Zain Nigeria

Econet Wireless Group (EWG) of South Africa has started moves to block
the sale of Kuwaiti-based Zain's interests in Zain Nigeria until a
ruling on a dispute over ownership of the company is passed. Last week
media reports indicated that the Zain Group, a mobile telecoms company
with operations in 22 countries in the Middle East and Africa, may
agree to a deal to sell its African operations to French company
Vivendi for up to USD12 billion.

According to TeleGeography's GlobalComms database, Zain Nigeria was
founded as Econet Wireless Nigeria (EWN) in 2001, named after the
South African holding company Econet Wireless International (EWI)
which held a 5% stake and a contract to run the cellco. Following a
takeover attempt by Vodacom of South Africa in 2003, a protracted
boardroom dispute ensued, with EWI unwilling to relinquish its stake
or its management control. Eventually in 2004 EWN was renamed Vee
Networks and its brand name changed to Vodacom. Barely six weeks after
taking over the cellco, Vodacom pulled out of its contract and walked
away from Vee Networks, citing 'irregularities' in the payment of the
brokerage fees. Management of the company was handed to Dr Gamaliel
Onosode, of the Delta State Ministry of Finance, and services were
rebranded again, this time under the V-Mobile banner. Celtel
International, a division of Zain, purchased 65% of the company in May
2006. EWI has since surfaced to try and gain a court ruling to
overturn the sale to Celtel, claiming its pre-emption rights were
breached when its predominantly Nigerian partners decided to sell
their shares in V-Mobile to Zain in 2006.

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