Athlone Investments signs definitive agreement for acquisition of 75% of Moçambique based Vaninga & Investimentos
(Canada Newswire Via Acquire Media NewsEdge) Gordon Edwards – Vaninga's Chairman: "The growth potential in the data centre market in the southern part of the African continent is huge: in the future we will see the broadband and cloud services market developing at a rate similar to that experienced in the African cellular market."
TORONTOANDTEL AVIV, June 23, 2014 /CNW/ - Today, Athlone Investments signed a share purchase agreement providing for the acquisition of 75% of the Moçambique based telecom company Vaninga & Investimentos Limitada. Vaninga will act as a provider of digital communication and data centers services focused on customers in Moçambique and the surrounding countries. Athlone Investments intends to appoint key members of the Vaninga team to Athlone's Board of Directors following approval of the shareholders General Meeting.
These are entrepreneurs with a strong background in the deployment of ICT infrastructure in new markets – the company is led by two leading industry figures – Ross Macdonald and Gordon Edwards. Macdonald was a founding member of MTN and was responsible for the Groups international expansion strategy. Today the company has over 210 million subscribers in 23 African and Middle East countries and annual revenues in excess of $35bn. Edwards was one of the founders of DataTec a Global IT services company which operates in 50 countries across the globe with revenues today of over $5bn. Edwards also has extensive experience in deploying telecommunications infrastructure in the Southern Africa region.
Moçambique has experienced, over the past 5 years, average growth rates of 7% per year. This is a higher growth rate than that of the African continent which stands at an average of 5% a year. Analysts forecasts show that it will maintain if not extend this differential. The main reason for the accelerated growth of Moçambique's economy is its development as a powerful energy supplier. In addition to the growing coal mining industry which is expected to make Moçambique the largest exporter of coal in the world within the next 10 years, about 100 TCF of natural gas was recently discovered which led to energy giants such as Anadarko, ENI and Statoil beginning operations in Moçambique. Analysts predict that by 2019 Moçambique's economy will grow at an average rate of 8%.
The Moçambique communications market is relatively underpenetrated with approximately 26 mobile phone subscribers per 100 inhabitants and less than one land-line subscriber per 100 inhabitants. There are just 23,000 broadband subscribers which represents a 0.6% penetration of households - one of the lowest in Africa. There are however 1.9 million mobile broadband connections and there are over 1 million Internet users and 400,000 Facebook users despite the fact that just 6% of the population of 25 million has access to computers. Athlone, believes that the market, provides more than enough scope for Vaninga to establish itself in order to meet existing needs and to prosper in the wake of Moçambique's rapid economic growth.
Industry analysts estimate that by 2020 mobile penetration will reach 99% with 30 million connections including 19.5 million mobile broad band connections – more than 10 times the number of connections today.
Athlone points out that Moçambique is, from a strategic point of view, located at an important landing point for a number of recently laid marine cables delivering massive capacity of international data connectivity. The company expects that, following on from Vaninga establishing itself in Moçambique, it will be able to act as a hub for data centre and cloud related services serving the neighboring countries and wider region.
Apart from four, small data centers working primarily for the government, at present there are no neutral data centers serving the small business and consumer market in Moçambique. In South Africa, for example, today there are 25 data center providers and some 60 data centers with a floor area of some 65,000m2.
Vaninga has a license to provide advanced communications services that, as of today, do not exist in Moçambique. These services include Cloud based services, voice and data services over fixed and wireless networks and Internet services to commercial users and consumers. Vaninga intends to make its services available to Government, financial services companies, telecommunications companies, multinational companies, SME's and consumers.
According to the memorandum of understanding signed recently, Athlone will issue approximately 30m shares to the Vaninga shareholders in return for 75% of Vaninga's outstanding shares. This will give the Vaninga shareholders a 50% stake in Athlone. Athlone will also provide Vaninga with a $2 million dollar loan, $500,000 of which has already been advanced. As of today, the deal requires the approval of Athlone's shareholders General Meeting and other regulatory approvals. The Athlone Shareholders meeting has been called for July 24, 2014.
Stan Bharti, Chairman of Athlone, says: "The growth potential in the field of data centres and Cloud services in Moçambique and Southern Africa is huge. Communications infrastructures have improved significantly and provide fertile ground for the provision of essential and advanced new Cloud services in Moçambique and surrounding countries".
Toronto / Tel Aviv13 March 2014
To view a copy of the news release in Hebrew, please view PDF.
This forward-looking information is based, among other things, expectations and assumptions of the Company regarding the current status, areas of operations and business environment as they are at the date of this document, the analysis of general information available to the Company at the date of this document and future developments and there is no certainty as to the willingness, integrity and / or realization. Realization of forward-looking information stated may be affected by factors that cannot be assessed in advance and are not controlled by the Company, including changes in market conditions and the environment, regulatory changes, changes in economic conditions and / or the realization of any of the risk factors of the Company as detailed in the Company which is posted Magna.
SOURCE Athlone Investments
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