Libtelco has announced that it is in final negotiation for the acquisition of Novafone - a deal which would see 100 Liberians remain on their jobs.
The Liberian government’s acquisition deal was launched after intelligence leaked that Lonestar had embarked on similar effort to buy Novafone out of the market and make the Liberian mobile telecommunications market a two player market.
“It would have been economically disastrous if Lonestar had succeeded in buying Novafone during these difficult moments in our country because they do not care about the wellbeing of the citizenry. They don’t even have mercy for subscribers’ money which they steal everyday under dubious means. I think the government acted wisely on this one,” says James Manobah of Plumkor, Sinkor, in an interview with this paper yesterday.
Confirming subscribers’ apprehension, the Managing Director of Libtelco, Sebastian Muah said the Lonestar/MTN version of the transaction would have proven counterproductive to the development and growth of the sector which could adversely affect the end-users- the Liberian people as well as telecommunications customers.
“The transaction would have resulted immediately with a net loss of jobs for over 100 Liberians during these difficult times in our post-Ebola recovery process, Muah disclosed.
He said additionally, nationally security was another issue, citing the situation when Lonestar/MTN shut down its network during a critical time during the 2011 elections.
MD Muah intoned that the government of Liberia, represented by Libtelco did its homework as far as due diligence is concerned.
“We did our homework. And while not all of what one does is perfect, I believe I put in place a team of competent Liberian experts to help me review and meet my objectives of going against a corporation, that has yet to show true value to Liberians, in a acquisition battle that they have lost,” the Libtelco boss said. To this end, he said the telecommunications corporation sought the service of Baker and Tilly to review the assets and liabilities; hired Heritage Law Partners to conduct a full legal due diligence of the corporation and its owners.
More besides, MD Muah pointed that the Government key decision makers on the Debt Management Committee and the Economic Management Team to make sure that Libtelco’s proposal worth consideration.
Mamie Saiway, a scratch card dealer on the Old Road wonders “what would have happened if Lonestar bought Novafone and then one day they chose to disconnect their service like they did several times especially on November 7, 2011 when the violence erupted between partisans of the Congress for Democratic Change and the Liberia National Police during electioneering period.
“We had our children in school and there was no way to reach school authorities who are using Lonestar because the company shut down,” Mamie said.
Ms. Saiway, in a rather terrifying tone stated that she and other business people selling Lonestar recharge cards are even going out of business because customers fear that they would lose their credits whenever they recharge. Hence, she said the decision of Libtelco to intercept the “evil attempt” was very good to be celebrated.
With the deal nearing completion, Libtelco, as the provider with the most capacity in the Cable Consortium Liberia (CCL) and having no means of distributing that capacity, it became apparent that in the medium term, the corporation needed to find a means of distributing that capacity to generate revenue.
“The fiber optic requires much more funds to build, deploy or operationalize. The cost per user would be far more than what an average Liberian could afford with the current 52% poverty level. So a broader network was required to offload and sell the abundant capacity that LibTelCo owns in the ACE cable,” Muah stated, adding, the deal with Novafone was borne against this backdrop.
“I want to focus on the task at hand: expand the sector, and create more opportunities for Liberians to assure the development of a knowledge economy.
Lonestar/MTN’s sole interest in the buyout deal was to accordingly sabotage government’s intervention that would eventually save Liberians in the employ of Novafone from losing their source of income.
In line with the failed Lonestar/MTN – Novafone buyout attempt, the core network equipment was not part of the deal and Lonestar was willing to leave the modern core equipment, and again just buy Novafone out of competition for about $16-18 million dollars, ignoring loss of jobs and the network equipment valued at $9 million. This would put the value of Novafone at worse case $25 million or ideal case $27 million.
Since losing out on the Novafone deal, Lonestar/MTN shareholder Benoni Urey has reportedly unleashed his attack dogs on LibTelCo and the Liberian government.
However, Sebastian Muah is unruffled by the unsavory comments from Lonestar/MTN surrogates, whose sole intent is to paint a murky portrait of the government’s decision.
“I am amazed at the level of political wrangling that is seeping in a purely commercial matter, such that a major competitor is resulting to mischievous tactics and rhetoric that looks like sour grapes,” he maintained.