Digicel in group bid for African network

HAVING CONQUERED the mobile phone markets in the Caribbean and the Pacific islands, Irish businessman Denis O’Brien appears to have set his sights on Africa.

It emerged yesterday that Mr O’Brien’s Digicel mobile group is part of a consortium proposing to pay $270 million (€204 million) for a majority stake in LAP GreenN, a mobile network owned by a Libyan state investment fund set up by former dictator Col Muammar Gadafy.

No comment was available from Digicel yesterday but informed sources confirmed the company’s involvement in the consortium to The Irish Times.

Centamon, a company controlled by British consultancy Levant Group, and Demco, a Greek investment company, has bought a 65 per cent in LAP GreenN and asked Digicel to run the business. It is not clear what size of equity participation Digicel would have in the business.

The deal is subject to approval from the UN Security Council and the European Union.

A report yesterday in the Times newspaper in London cited documents that suggested the takeover agreement was signed on August 8th, just two weeks before the overthrow of the Gadafy regime.

It added that the deal had been given the green light by the National Transitional Council of Libya and would proceed.

This could not be clarified yesterday.

LAP GreenN was incorporated in February 2007 to invest in communications and technology. It started with a licence in Uganda and has since spread its operations into Rwanda, Niger, Ivory Coast, southern Sudan, Zambia, Togo, Sierra Leone and Chad.

It previously had a stake in Telekom Serbia but sold the holding this year.

LAP GreenN is part of the Libya-Africa Investment Portfolio, which was set up by Gadafy in 2006 to focus on contributing to the development of African countries.

A state-owned vehicle, it started with initial capital of $5 billion.

It has not all been plain sailing for LAP GreenN. In Zambia, it has been accused by the justice minister of “fraud” in relation to its acquisition of Zamtel, a local operator.

Levant is a London-based private group that invests in start-up oil, gas and mining businesses in Africa. Demco’s interests include ownership of Cosmoline, a telco in Greece.

Reports suggest that Centamon has agreed to fund all the required capital for the expansion of the business over the next two years.

Africa is seen as a potentially attractive market for telecoms operators who can offer reliable and widespread low-cost mobile phone services.

This is a model that Digicel has perfected in the Caribbean, where it broke the stranglehold of Cable Wireless.

Digicel increased its earnings last year by 27 per cent to $954 million.

At the end of March 2011, it had 11.5 million subscribers across 32 markets in the Caribbean, central America and Pacific islands.