Contrary to a recent announcement by Econet Wireless founder, Strive Masiyiwa, that he has already acquired shares previously held by MTN South Africa in local telecommunications giant Mascom Wireless –a company he formed back in 1998- Botswana Public Officers Pension Fund (BPOPF) has kicked off a process to mop up all the shares.
After several changes to its composition between different investors, the ownership of Mascom is currently divided in shareholding between MTN 53%, BPOPF 40% and Econet 7%. MTN South Africa recently announced plans to disinvest in some jurisdictions, among them Botswana where they co-own Mascom Wireless. The decision was partly influenced by a rigid management contract they inherited from Portugal Telecom, which prevented MTN from taking full control of the strategic direction and operations of Mascom despite being the majority shareholder. MTN could not even exert influence on the Board of Directors, which until recently, was the preserve of technocrats and government appointees.
The Patriot on Sunday has it on good authority that the disposal of MTN shares dates back a couple of years when the company approached BPOPF offering them all their shares in Mascom. Despite that at the time BPOPF was not keen on increasing shareholding, the Fund nevertheless invited MTN to make a formal offer. That never happened but instead MTN tried to sell to Econet, who declined the offer indicating that they could not raise the capital required for the transaction at the time.
Back in 2015, Econet had also tried to sell its 7% shareholding to BPOPF but failed after the Fund discovered that controversial asset management firm -Capital Management Botswana (CMB)- had inflated the value of the shares in their valuation. CMB had made an offer for the shares through the Botswana Opportunities Partnership (BOP), an instrument through which BPOPF wanted to grow local industries and support economic diversification efforts through local investment.
Fast forward to 2019! The BPOPF was recently caught by surprise and left reeling in shock when they learned that Econet is in the process of acquiring all MTN shares at Mascom. Investment experts are equally perturbed at how BPOPF, a pension fund that boasts of P62 billion assets under management and representing over 160 000 former and current civil servants, could be overlooked in such a lucrative transaction particularly because they are the second largest shareholder at Mascom. It is the latter point that BPOPF immediately brought to the attention of MTN, that they deserve to be given the first right of refusal for the shares. But MTN would have none of that even suggesting that BPOPF had cited the wrong clause in the shareholding agreement. They are going ahead with the sale to Econet, they insisted.
But BPOPF board is not leaving the matter lying down. Sources this week told The Patriot on Sunday that the Board of Trustees has instructed management to set in motion plans to acquire the MTN shares and will stop at nothing to achieve that. “We are exercising our right of refusal as the holders of the biggest shareholding in the company after MTN. We cannot let such a lucrative opportunity for investment to slip through our fingers,” a source said.
Should MTN refuse to sell to BPOPF, the fund is prepared to escalate the matter to the regulator –NBFIRA- to intervene and appoint an independent expert to advise on the transaction, failing which a bruising legal tussle will ensue to force the SA telecommunications behemoth to comply with regulatory provisions. Already, there are indications that BPOPF enjoys the support of the regulator.
Politics
But there is more. Long before the matter was settled, Masiyiwa was sharing a podium with President Masisi in an Afripreneur Youth Town hall meeting at the GICC held under the theme ‘Unlocking Youth Entrepreneurship through the Knowledge based Economy’. They have committed to meet again in three months to assess progress on agreed projects as well as to forge other partnerships that will ultimately create employment for the youth.
At the Town Hall, attended by a mix of young entrepreneurs and unemployed youth, the ICT business moghul promised to provide training for youth and extend internet connectivity to every home in Botswana.Masisi announced an agreement to provide facilities for youth innovators and entrepreneurs for a whole year rent and utilities free while Masiyiwa will provide the training. Those succesful will utilise the skills acquired to set enterprises to create employment opportunities for other youth.
Masiyiwa also promised to setup infrastructure for provision of internet in all homesteads in Botswana, as an enabler for innovation while providing sustainable jobs for the youth. He promised to provide technical assistance to the government of Botswana to ensure that youth-led ICT companies take the project on and own it. This was all music to the ear, Masisi had struck the right cord with the prospect of job creation looking more achievable than ever before.
In clear admiration of Masiyiwa’s colourful presentation Masisi was held in awe and could not stop waxing lyrical about potential opportunities ahead. While to many the rendezvous seemed like a noble cause, aimed at promoting job creation, elsewhere it is viewed as meddling by Masisi in the tug of war for the soul of Mascom. There are questions as to why the President bought Masiyiwa’s story hook, line and sinker and seems to be determined to help him take over the largest telecommunications corporation in Botswana outside government. Detractors say the coincidence between Masiyiwa’s revived interest in Mascom and close relationship with the Head of State is too much to ignore.
There is growing speculation that Masiyiwa could have cut a deal with some political elites, among them Masisi, to sponsor their campaign ahead of 2019 general elections or cut them some shareholding in the multi-billion pula telecoms corporation. Without revealing too much, and perhaps calculated to soften up any objection, Masiyiwa was quick to tell whoever cared to listen that once he completes acquisition of MTN shares-making him the majority shareholder at Mascom- he will list the company on the Botswana Stick Exchange (BSE) to enable locals to purchase a stake in the money spinning telecommunications industry. But industry players question the sudden cosy relationship between Masisi and the Zimbabwean billionaire (Masiyiwa). Could Masiyiwa have been preparing ground and lobbying for support from the most powerful man in the land at a time when he anticipated objection from BPOPF over acquisition of MTN shares at Mascom? Only time will tell.