BARBARIANS at the GATES of KENYA: ATC’s moves to consolidate Wins from Africa Online Deal by Investing KSh 2 billion in Wananchi Online and sends signal that Private Equity Industry has its eyes firmly set on Kenya”
*BARBARIANS at the GATES of KENYA* *“ATC’s moves to consolidate Wins from Africa Online Deal by Investing KSh 2 billion in Wananchi Online and sends signal that Private Equity Industry has its eyes firmly set on Kenya”* Like the famous KKR acquisition of RJR Nabisco that put the Private Equity industry center stage in America in the 80’s, industry sources are seeing the Africa Telecom Company Ltd’s (ATC) KSh 2 billion investment plans for Wananchi Online as a signal that the Private Equity Industry in Kenya is set to explode. ATC shot to prominence last year when they purchased 30% of Africa Lakes/Africa Online at Stg 10 per share and then got into a bitter and hostile takeover battle with Telekom South Africa. They successfully extracted a heavy price from Telkom South Africa by eventually selling their shares for Stg 25 per share plus another US$ 1.5m of costs. Telkom South Africa’s share price fell significantly at the news and their CEO has subsequently been forced to resign. The deal was a classic private equity play. Africa Online’s revenues have been shrinking for 5 years at a time when the Internet industry in Africa as a whole was growing at record speeds. The cause was typical of many public companies in the UK: bloated head office costs, overpaid and inept senior executive management and a board that could not deliver change. Richard Bell a seasoned ICT entrepreneur turned Private Equity Manager saw the latent value in the business and realized that the only way to release the value was through change – with or without the permission of the board. Leveraging of this experience Bell/East Africa Capital Partners teamed up with Mark Schneider a US Media Entrepreneur and brought in local support through James Gachui (Chairman of Transcentury) & Jimnah Mbaru (Chairman of Dyer & Blair) both well known local financial investors, to use ATC to invest in Wananchi Online and create Wananchi Telecom. It therefore came as no surprise to the Industry when Wananchi Online announced to its shareholders this week that there would be an EGM on Friday 20^th April at which shareholders would be asked to approve a capital investment and infrastructure rollout costing KSh 7 billion over 5 years with the first two years accounting for nearly KSh 2 billion of capital. Commenting on the investment Richard Bell said that the funds would be used to rollout a country-wide broadband Wi-Max network delivering Internet and Fixed Line Voice services “…Wananchi Online’s roots were in making the Internet affordable to Kenyas now *Wananchi Telecom* will do the same by delivering the most inexpensive and affordable consumer broadband service in Africa – and that will be GUARANTEED. It’s a very exciting time in this industry and we believe that Kenyans are crying out for a true broadband service in their homes and our Wi-Max product will deliver this……”. The network will be ready in greater Nairobi by the middle of the year and in all major towns by the end of the year. Joseph Mucheru another local ICT guru and Deputy CEO of the new group went on to commend the Government for their efforts in developing the ICT sector and committed that Wananchi Telecom would support all of these initiatives including the governments plans for Schools, Universities and ICT Villages “…by the time TEAMS, SEACOM and EASSY maritime cables get to Mombassa our network will be ready and all Kenyans will have broadband available. We Kenyans (and some operators) tend to spend a lot of time complaining about the government without recognizing the government’s achievements. The Hon Mutahi Kagwe and PS Ndemo have in my view set the seeds of a great future for Kenyans in ICT……..” The sheer scale and audacity of their plans (3 times larger than Access Kenya’s IPO, with 5 times more base stations) for Wananchi Telecom have taken even industry insiders by surprise, but that’s typical of Private Equity. Whether you like them or hate them the one certainty is that the power, speed and agility *these Private Equity Barbarians *is going to be a big force in Kenya over the next 5 years.
Dear Alice, Does this result into a new policy which will allow the bundling of infrastructure and services? I surely do hope this is not the case! Related to this topic: I was now already asked 10 times from different corners if it is true that KDN was taken over by "Babarians" or any foreign or local ICT company .. someone is busy to use the hype to create rumors .. I guess I should be flattered if people translate or activeness as a sign of a "big brother". I am sorry to disappoint, I am the only Babarian in the whole of KDN, all the others are born Kenyans and are the same shareholders since KDN's existence .... As Churchill said: " The rumors about my death were slightly exaggerated". Rgds Kai -----Original Message----- From: kictanet-bounces+kai.wulff=kdn.co.ke@kictanet.or.ke [mailto:kictanet-bounces+kai.wulff=kdn.co.ke@kictanet.or.ke] On Behalf Of alice Sent: Thursday, April 19, 2007 14:42 To: kai.wulff@kdn.co.ke Subject: [kictanet] BARBARIANS at the GATES of KENYA: ATC's moves to consolidate Wins from Africa Online Deal by Investing KSh 2 billion in Wananchi Online and sends signal that Private Equity Industry has its eyes firmly set on Kenya" *BARBARIANS at the GATES of KENYA* *"ATC's moves to consolidate Wins from Africa Online Deal by Investing KSh 2 billion in Wananchi Online and sends signal that Private Equity Industry has its eyes firmly set on Kenya"* Like the famous KKR acquisition of RJR Nabisco that put the Private Equity industry center stage in America in the 80's, industry sources are seeing the Africa Telecom Company Ltd's (ATC) KSh 2 billion investment plans for Wananchi Online as a signal that the Private Equity Industry in Kenya is set to explode. ATC shot to prominence last year when they purchased 30% of Africa Lakes/Africa Online at Stg 10 per share and then got into a bitter and hostile takeover battle with Telekom South Africa. They successfully extracted a heavy price from Telkom South Africa by eventually selling their shares for Stg 25 per share plus another US$ 1.5m of costs. Telkom South Africa's share price fell significantly at the news and their CEO has subsequently been forced to resign. The deal was a classic private equity play. Africa Online's revenues have been shrinking for 5 years at a time when the Internet industry in Africa as a whole was growing at record speeds. The cause was typical of many public companies in the UK: bloated head office costs, overpaid and inept senior executive management and a board that could not deliver change. Richard Bell a seasoned ICT entrepreneur turned Private Equity Manager saw the latent value in the business and realized that the only way to release the value was through change - with or without the permission of the board. Leveraging of this experience Bell/East Africa Capital Partners teamed up with Mark Schneider a US Media Entrepreneur and brought in local support through James Gachui (Chairman of Transcentury) & Jimnah Mbaru (Chairman of Dyer & Blair) both well known local financial investors, to use ATC to invest in Wananchi Online and create Wananchi Telecom. It therefore came as no surprise to the Industry when Wananchi Online announced to its shareholders this week that there would be an EGM on Friday 20^th April at which shareholders would be asked to approve a capital investment and infrastructure rollout costing KSh 7 billion over 5 years with the first two years accounting for nearly KSh 2 billion of capital. Commenting on the investment Richard Bell said that the funds would be used to rollout a country-wide broadband Wi-Max network delivering Internet and Fixed Line Voice services ".Wananchi Online's roots were in making the Internet affordable to Kenyas now *Wananchi Telecom* will do the same by delivering the most inexpensive and affordable consumer broadband service in Africa - and that will be GUARANTEED. It's a very exciting time in this industry and we believe that Kenyans are crying out for a true broadband service in their homes and our Wi-Max product will deliver this..". The network will be ready in greater Nairobi by the middle of the year and in all major towns by the end of the year. Joseph Mucheru another local ICT guru and Deputy CEO of the new group went on to commend the Government for their efforts in developing the ICT sector and committed that Wananchi Telecom would support all of these initiatives including the governments plans for Schools, Universities and ICT Villages ".by the time TEAMS, SEACOM and EASSY maritime cables get to Mombassa our network will be ready and all Kenyans will have broadband available. We Kenyans (and some operators) tend to spend a lot of time complaining about the government without recognizing the government's achievements. The Hon Mutahi Kagwe and PS Ndemo have in my view set the seeds of a great future for Kenyans in ICT...." The sheer scale and audacity of their plans (3 times larger than Access Kenya's IPO, with 5 times more base stations) for Wananchi Telecom have taken even industry insiders by surprise, but that's typical of Private Equity. Whether you like them or hate them the one certainty is that the power, speed and agility *these Private Equity Barbarians *is going to be a big force in Kenya over the next 5 years. _______________________________________________ kictanet mailing list kictanet@kictanet.or.ke http://kictanet.or.ke/mailman/listinfo/kictanet Please unsubscribe or change your options at http://kictanet.or.ke/mailman/options/kictanet/kai.wulff%40kdn.co.ke
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alice -
Kai U. Wulff