Tmcel secures US$200 million “on very good terms” – for modernisation and expansion

Login

Register

http://www.clubofmozambique.com/

Tmcel secures US$200 million “on very good terms” – for modernisation and expansion

12:54 CAT | 28 Jan 2020

File photo: A Verdade

Mozambique Telecom SA (Tmcel) has estimated at US$350 million (about 21 billion meticais) the investment it needs to modernise and expand its network and 4G and 5G services, and to be able to compete with Vodacom and Movitel again.

Mohamed Rafique Jusob, chairman of the Tmcel board, has now revealed to @Verdade that the company has “secured 200 million dollars on very good terms”.

Created just over one year ago as a way of securing the Mozambican state’s presence in the strategic telecommunications sector in Mozambique, Tmcel inherited liabilities of 24 billion meticais, accumulated since 2012 by the now defunct companies Telecomunicações de Moçambique (TDM) and Moçambique Cellular (mcel).

@Verdade found out that the revitalisation strategy of the company that emerged from the merger of TDM, Mozambique’s pioneer telecommunications company, and mcell, the first mobile operator in Mozambique, involves investing in its modernisation and expansion so that it can compete in the dynamic national market again and be able to generate the revenue needed for its financial recovery in the medium term.

“In the next five years, the needs for modernisation and expansion of the 4G and 5G network and services are in the order of US$350 million”, the Chairman of the Board of Directors of Mozambique Telecom SA told @Verdade.

“We have already secured 200 million dollars on very good conditions,” Mohamed Rafique Jusob revealed in a telephone interview, without specifying the source of the funds.

@Verdade has however established that the financing was obtained from the Exim Bank of China, to be used acquiring technology and telecommunications know-how in the Asian country. In late 2018, the giant Huawei became Tmcel’s strategic partner.

Asked by @Verdade about this exposure to China, taking into account that, before this financing, Huawei and ZTE were already listed among mcel’s main creditors, Jusob stated that, “at this point in time, China offers the best technical and financial conditions”.

Indeed, and apart from the controversy that its devices could be used for espionage by the Chinese government and the trade war with the United States of America, Huawei in 2019 became the second-largest smartphone manufacturer in the world, with a market share higher than that of Apple, and close to leader Samsung. Huawei also leads the market for infrastructure services for 5G access networks ahead of Ericsson, Nokia, and Samsung.

Tmcel inherited assets valued at 28.9 billion meticais

Without going into details – after all, the competition is “not sleeping” – Tmcel’s PCA indicated that although the inherited liabilities are heavy, “as a result of the revaluation of fixed assets, the share capital has improved substantially with the merger process”.

Tdm-capital-social — *TDM, Financial Statements 2018*

@Verdade has learned from financial statements of the last financial years before its merger that TDM’s share capital was 2.8 billion meticais, and mcel’s another 3 billion. In addition, Tmcel’s equity situation is relatively comfortable, since it also inherited the tangible assets of the two defunct companies – 10.8 billion meticais from TDM and 11.8 billion meticais from mcel.

Additionally, the companies’ management, after a revaluation of tangible assets at current prices in the real estate market, obtained a “revaluation surplus” amounting to 6,679,013,816 meticais.

Tdm-activos — *TDM, Financial Statements 2018*

Meanwhile, the new strategic partnership seems to have even equipped Mohamed Rafique Jusob to conduct the so-called “negócios da China”, since one of the assets located in Maputo, on Avenida Kim il Sung, was sold to the multinational ExxonMobil well above its appraised value and market prices.

Zitamar reported that the oil company paid US$47 million for an asset valued at US$4 million. @Verdade has established that this amount is being used to rationalise the labour force surplus that Tmcel inherited from TDM and mcel.

By Adérito Caldeira

Source: A Verdade