Johannesburg - A R6.55bn sale of a majority stake in Neotel to connectivity provider Liquid Telecom is still on track and could be finalised by the end of 2016.
Nic Rudnick, CEO of Liquid Telecom, told Fin24 that the parties could comment on the timelines which remain within the control of the regulator and the Competition Commission.
"We are hopeful that, with all due process, the applications will be dealt with as speedily as possible and ideally before the close of the calendar year," he said.
Kennedy Memani, who is acting as Neotel CEO, told Fin24 that the next steps will be to submit the transaction to Icasa (Independent Communications Authority of South Africa), the Competition Commission and then the Competition Tribunal for approval.
The acquisition by Liquid Telecom came after Tata Communications announced that it would sell its controlling stake in the company.
“The acquisition will create the largest pan-African broadband network and B2B telecoms provider spanning 12 countries from South Africa to Kenya with further expansion planned,” Memani told Fin24.
Memani is acting in place of former CEO Sunil Joshi, who resigned after an investigation in August 2015 by the board of the company cleared him of bribery.
Rajesh Bux is acting as the company’s chief financial officer after Joshi and former CFO, Steven Whiley, also resigned after investigations into accusations of making illicit payments of R91m in fees to a ‘letterbox company’.
Neotel was accused of making the payments to win a R1.8bn telecoms services contract from transport parastatal Transnet.
Earlier this year, South Africa’s biggest mobile network Vodacom [JSE:VOD] abandoned bid to acquire Neotel for R7bn “due to regulatory complexities and certain conditions not being fulfilled”.
“I believe Liquid Telecom is the right partner for Neotel. Our respective customers and networks complement each other well, the transaction structure is in line with our country’s critical BEE agenda,” he said.
“I am confident that our customers and our employees will benefit from the transaction and from the resulting stability and business expansion,” Memani added.