Nigeria: Starcomms Seeks Shareholders Approval for Merger With Capcom

ALLAFRICA

THISDAY [04/12/12]

The bid to get a new investor for Starcomms Plc now lie in the hands of its shareholders as the company announced yesterday that it has posted to shareholders documentation relating to Capcom Limited's proposed investment in the telecoms company.

The company said in a statement that the transaction would be effected through a scheme of arrangement and a private placement, both of which had been approved by the board of directors of Starcomms.

Starcomms said the scheme had also been filed with and obtained the necessary sanction of the Federal High Court and both are now subject to approval by Starcomms' shareholders.

The court-ordered meeting and the 2011 annual general meeting (AGM) of the company are scheduled to take place late December to enable the shareholders vote on the scheme and to pass special resolutions giving effect to the private placement and approving the transaction. This will be followed by final regulatory approvals and Capcom will assume control of Starcomms.

THISDAY findings revealed that the transaction will be effected through a scheme of arrangement to be followed by a private placement and a rights issue. Further checks showed that 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 50 kobo each, and the subsequent issuing of 662,550,000 new and fully paid up ordinary shares to Capcom, constituting 90.5 per cent of the post scheme-reorganised, issued share capital.

As part of the transaction, Capcom will inject a combination of assets and cash into Starcomms worth $210 million.

Speaking about the transaction, Interim CEO of Starcomms Plc, Olusola Oladokun, said: "Starcomms has experienced significant challenges over the past two years, at the heart of which have been the changing competitive and operational dynamics of the Nigerian telecommunications industry, especially in the voice business.

"As a result, the board of directors has been considering a number of options to reposition the company for growth. After a careful consideration, we believe that the investment by Capcom, which will provide the capital required for continued operations as well as enabling investment in new technology, combined with the injection of new spectrum and the CDMA assets of Multi-links, creates the best possible platform for Starcomm's future. We strongly recommend - and look forward to - the transaction being approved by our Shareholders."