Starcomms to ‘redefine mobile broadband’

BUSINESS

By Kokumo Goodie, Lagos, Nigeria

Nigeria’s ailing code division multiple access (CDMA) operator, Starcomms, says it will redefine mobile broadband data services in the country with the injection of funds by Capcom, a special vehicle set up to buy the assets and liabilities of the firm and that of MTS and Multilinks. 

Speaking during an interactive session with the media in Lagos, Chief Executive Officer, Capcon International, Ademola Elesho, said the firm has concluded arrangements to inject a combination of cash and assets worth USD210 million into Starcomms as part of efforts to buy controlling shares in the ailing telecom firm, adding that the firm has opportunities to bounce back and play significant role in the market.

According to him, the ailing telco will be made to atract more highly profitable data subscription in the short term through the launch of 4G mobile broadband or long term evolution (LTE) technology, adding that the availability of 20 MegaHertZ (MHZ) contiguous spectrum 1900MHz range, will allow the telco to do data very well.

Elesho said the firm is going to raise the funds through equity and assets to seal the transactions.

“The transaction will be effected through a Scheme of Arrangements to be followed by a Private Placement and a Rights Issue. The  scheme will involve the cancellation of  N3,448, 646, 872 in the company’s share capital comprising 6, 897, 293, 744 ordinary shares of 50kobo each, and the subsequent issuing of 662, 500,000 new, fully paid up ordinary shares to Camcon constituting 90.5 per cent of the post scheme-organized issue share capital,” he said.

Elesho said the scheme is subject to the approval of shareholders at the Court -Ordered Annual General Meeting slated for December 28, 2012, the approval of the NCC,

Also, the interim Managing Director, Starcomms Plc, Olusola Oladokun, said various litigations facing the company had been sorted out to enable the transactions scale through. Oladokun said Starcomms has suffered a 'liquidity position' in recent times, adding that the development has resulted in its current debt position of N15 billion.

“The company has defaulted in debt service with some of its creditors. We hope to continue to service the debt, if the Capcom deal scales through,” he said.