The government acquired all shares in AirtelTigo for US$1, Ursula Owusu-Ekuful, the Minister of Communication and Digitalisation has said.
According to her, the current state of the company and the circumstances under which the shareholders decided to exit the market, led to the acquisition of the company at the said amount.
The move is to offer the government – the new shareholders – some financial space to reinvest into the company to bring it out of the challenges it is bedevilled with.
In addition to this, the government has renegotiated many of the loan facilities the company had entered into and been able to achieve a high level of debt forgiveness. To further better the balance sheet of the company, the former shareholders and government agreed to equally share a US$100 million facility acquired from Standard Bank; the facility remains one of the largest debts on the company’s books.
“We worked closely with the Ministry of Finance in all the negotiations so far and they understand what it entails. Now the shareholders of AirtelTigo are not passing the shareholder loans which they’ve advanced to the company. That’s one of the main items hurting the balance sheet of the company, 100% of all the loans have been forgiven more or less. They are not seeking repayment of those loans.
There were also some commercial facilities that the company took, key among them is a US$100 million facility from Standard Bank and with that also, AirtelTigo has taken 50% of that facility, so the company is now just saddled with 50% of that liability. These measures also helped free the company from the burden that it was under,” Owusu-Ekuful said in an interview with the B&FT.
The minister is confident that the negotiation has given the company a new life and any interim management that would take over would have a good balance sheet on which it can attract investments to inject into the operations of the company.
She said these kinds of developments are part of the dangers that a state is opened to with multinational establishments in critical sectors.
“Government isn’t going anywhere that is the danger when you have multinationals, what impact the decisions they make may not be the same as what your own national companies will take into consideration.
“For them, they have the option of leaving to go back to their home region but we are not going anywhere and so it is in our interest to also grow local entrepreneurs in the space and government is committed to doing that, maybe this will provide us a vehicle to also do that even more,” she said.
Owusu-Ekuful signed on behalf of the government of Ghana, while Jatina Catharina Uneken-van de Vreede, Martin P Frechette, Timothy Pennington, Eric Nana Nipah and Vish Ashiagbor signed on behalf of the seller entities.
A statement announcing the official signing said the government considers the move as a positive step as it adds to the growing portfolio of digital infrastructure assets being utilised by the government.
It further explained that the government will operate the national asset in the best interest of the nation, the company, telecommunications industry, and ensure the protection of the interests of all employees, customers, contractors, suppliers, stakeholders and sustain the digital transformation of Ghana.