Tuesday, October 20, 2009

Team Recommends Change In GT - Vodafone Sale Agreement

The committee set up to investigate the sale of a 70% stake in Ghana's national PTO, Ghana Telecom, to the UK's Vodafone Group has recommended the government to consider renegotiating the Sale and Purchase Agreement, according to Ghana News Agency reports.

In a press statement published last Friday and signed by Dr Valerie Sawyerr, the Deputy Chief of Staff, the committee said that Ghana's government should in particular reconsider Parties to the SPA; compliance or otherwise of the SPA with the laws of Ghana, particularly the NCA Regulations and the Internal Revenue Act 592; value for money/ Transaction consideration; retention of the National Fibre Optic by the Government of Ghana as a strategic national asset; decoupling of the Ghana Telecom University from the transaction (already done); and return of GT investments to the Government of Ghana such as the Telecom Emporium.

Earlier this month we reported a leaked Ghanaian government report which claimed that last year's sale of a 70% stake in the country's incumbent fixed line operator GT to the UK's Vodafone Group was 'unconstitutional and illegal', and did not represent good value for money.

In July 2008 Vodafone confirmed that it had agreed to acquire a 70% stake in GT for USD900 million on a debt-free, cash-free basis. The deal implied a total enterprise value for GT of approximately USD1.3 billion, with the state retaining a 30% stake in the company. However, the leaked report alleges that the fixed line operator was undervalued and that the actual price paid by Vodafone was less than USD267 million.

Further, it accuses parliament of acting unconstitutionally in approving the deal without due process, and alleges that as a result of 'a complicated series of financial arrangements' the actual price released was far less than the stated asking price.

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