NSSA to get $43m for role in Telecel acquisition
THE National Social Security Authority will receive $43,25 million from Zarnet for facilitating the purchase of 60 percent equity in Telecel Zimbabwe through the provision of a $30 million mezzanine financing facility.
NSSA said it had already received a down payment of $7 million from the State-owned internet service provider, which also received $10 million help from the Government for this transaction.
Chairman Robin Vela said the $43,25 million payment represented a return of 16 percent on the funding NSSA provided under a transfer buy back agreement. The funding will be paid in instalments over three years.
“The board made the decision to exit the Telecel transaction. The exit structure would see the authority, on a secured basis, being paid $43,25 million in quarterly instalments over a three-year period with resultant internal rate of return of approximately 16 percent,” Mr Vela said.
The transaction gave controlling interest in Zimbabwe’s third largest mobile network operator to Zarnet.
The shareholding acquired by Government through Zarnet was held by Netherlandsbased mobile telecoms giant Vimpelcom.
The acquisition by Government will bring sanity to the endless shareholder disputes, which are believed to have constrained growth of the business.
Although NSSA eventually played the role of financing, it had at some point wanted to keep the shares.
It took the intervention of the Government, which had to call the NSSA to order, directing the authority to focus on financing the acquisition of Telecel, instead of attempting to grab the deal from Zarnet.
Government expressed concern at the authority’s predatory behaviour following a plethora of letters written by NSSA lawyers, threatening to derail the deal if Zarnet insisted on taking the Telecel stake.
Meanwhile, contributions and premiums to NSSA for the year to December 2016 rose 12 percent to $327,6 million from $292,9 million in 2015.
“Contributions alone increased by 14 percent from $242,8 million to $276 million while premiums increased by 2 percent from $50,2 million to $51,2 million.
“The increase in contributions is attributable to improved collections arising from stakeholder engagement,” Mr Vela said.
Investments income increased by 3 percent from $22,2 million to $23,5 million, which the authority attributed to money invested in the money market.