Airtel continues to struggle with Econet deal
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A recent ruling that re-instated a five percent equity ownership in Airtel Nigeria to Econet Wireless of South Africa is continuing to have negative effects on the company’s ability to operate in Africa, the company said in a press memo published on Wednesday.
The ruling means Airtel Africa is forced to pay as much as $3.1 billion to Econet Wireless and could see their overall market shares in a number of key markets, including Nigeria and Kenya, hit hard as the Indian company hopes to conserve its financial capacity and expand its offerings in Africa.
Airtel said it was still hoping to appeal the ruling and not be forced to pay a settlement to Econet in Nigeria.
Bharti’s ownership of Airtel Nigeria had been declared “null and void” because Econet, a five percent shareholder in the original deal had not been consulted.
Bharti Airtel in 2010 acquired the Africa operations of Kuwait-based Mobile Telecommunications Company KSC, which owns the Zain brand, in 15 countries at a cost of $10.7 billion.
The acquisition of Zain assets in Nigeria has been problematic from the beginning and the uncertainty that the judgment is throwing up is having a negative impact on its operations.
BM
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