Our Plans for Starcomms by Capcom

Capcom , the special purpose vehicle solely created to make an equity investment into Starcomms has revealed an ambitious turnaround strategy for the troubled telecom operator including a significant cash and asset investment.

Backed by some of the best brains in the telecoms industry, Capcom also plans to establish Starcomms as Nigeria’s leading 4G Broadband data provider- a plan hinged on the enhanced spectrum from the post transaction.

Demola Elesho, new company’s chief executive officer said that Capcom’s interest in Starcommsis primarily driven by the exciting opportunities the proposed spectrum combination brings.

Capcom was established in 2012 with money raised from investment and hedge funds, family offices and industry partners with years of commercial experience in emerging markets, especially Africa.

The company consists of MBC -a private trust with a focus on investing in emerging markets; OldonyoLaroEstate -a private family office based in Kenya with over 40 years’ experience of investing in Africa across numerous industries; Helios Investment Partners -an Africa-focused private investment firm which manages funds in excess of $1.7billion; and AMCON -the Asset Management Corporation of Nigeria.

According Elesho, Capcom will fund the transaction through a mixture of equity, debt and asset sales.

As part of the transaction Capcom will raise $50million of equity from a limited number of key investors and the equity is expected to be fully raised and deposited into escrow pre annual general meeting.

The company also said that additional funds will be provided through a $62 million loan from Afreximbank while part of the the transaction funding will be raised from the sale of Multi-links’ fibre assets to Suburban FiberCo.

With the huge financial war-chest, Capcom said the new management would work to aAttract more highly profitable data subscribers in the short term.

Ultimately, it plans to launch high speed 4G mobile broadband services in the next 12-18 months.

It is hoping that the cash injection will provide the financial security needed for Starcommsto embark on this strategic realignment.

With the money available, Capcom also hope to fund the technical integration process, new capex and continuing short term operating losses.

The expectation is that following a successful integration and stabilisation period, the planned roll-out of 4G services will open up significant opportunities for the new Starcomms

Capcom’s current business plan anticipates that the combined business will generate over $100 million of annual EBITDA within five years.