Statement from Bharti Airtel:
We have noted with concern the statement made by the Hon’ble Finance Minister on Jan 11, 2018. We would like to reiterate our statement of December 22, 2017. Further to ensure that there is a common and accurate recollection and understanding of facts surrounding the privatization of TTCL and related transactions, we are restating the sequence of events below which clearly demonstrate all of the transactions were completed with full transparency, integrity and fairness.
– In or around 2001, the Government of Tanzania initially launched two open tenders, one after the other, to seek investors to privatize TTCL. MSI Systems International Cellular Investments B.V. (MSI) was the successful bidder in the second round and eventually acquired a 35% stake in TTCL for a total consideration of ~ $65m.
– As a result, TTCL was owned 65% by the Government of Tanzania and 35% by MSI. Celtel Tanzania was subsequently established as a 100% owned subsidiary to launch the mobile operations using shareholder loans from TTCL which were later converted into equity.
– The Government of Tanzania and MSI in 2005 agreed to split the two companies and each (Government of Tanzania and MSI ) directly came to own 65% and 35% of TTCL and 65% and 35% of Celtel Tanzania. As each was already a shareholder, there was no valuation or consideration required. At the same time, MSI acquired an additional 25% stake in Celtel Tanzania and paid $28m to the Government of Tanzania.
– As of April 2005, MTC of Kuwait became the ultimate 60% shareholder of Celtel Tanzania (they rebranded the company 2 years later as Zain). Airtel acquired that stake in 2010. In 2015 the Government of Tanzania became 100% owner of TTCL by purchasing the remaining 35%.
In each instance, the transactions were initiated by the Government of Tanzania and conducted with full transparency and all the required approvals and submissions were completed in full compliance.
The transactions were also conducted under the oversight of the board and shareholders of MSI, represented by members of the World Bank (IFC), the British Government (CDC), the American Government (OPIC), the Dutch Government (FMO), and the German Government. It is important to note significant importance was placed by this group to ensure all conduct was consistent with the highest standards of ethics, governance and corporate conduct.
Taking note of certain remarks that have been made by the Hon’ble Finance Minister on the privatization process, we are requesting the Hon’ble Finance Minister to share with us the specific findings or concerns so we can respond with facts from the records of the company. We will seek support and collaboration from the previous shareholders/ Directors and officers of MSI to engage with the authorities to provide any necessary facts and a satisfactory explanation.
We intend to work closely with the Government of Tanzania and will take all steps necessary to resolve any doubts or concerns to the satisfaction of the Government of Tanzania and all of the other stakeholders, including our shareholders.
Bharti Airtel as a major foreign investor in Tanzania remains committed to the Tanzanian market and will take all steps to protect its businesses, employees, partners, and investments in Airtel Tanzania.
Imetumwa na Jackson Mmbando
Public Relations and Corporate Communications Manager at Airtel Tanzania.
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