Starcomms Shareholders Okay Capcom’s Take Over

Shareholders of Starcomms Plc at the weekend endorsed the re-organisation of its Share Capital structure as part of the requirements for its acquisition by Capcom, a special purpose vehicle created solely for the purpose.

The endorsement came at the recent annual general meeting and court-ordered meeting in Abuja and has now paved way for the creation of the biggest CDM operator in the country which promises better returns on investment for all the stakeholders.

The scheme approved by the shareholders involved the cancellation of N3,448,646,872 in the Company’s share capital, comprising 6,897,293,744 ordinary shares of 50 kobo each, and the subsequent issuing of 662,550,000new, fully paid up ordinary shares to Capcom, constituting 90.5 per cent  of the post scheme-reorganised, issued share capital.

As part of the Transaction, Capcom will now inject a combination of assets and cash into Starcomms worth $210 million.

Under the transaction, Capcom will contribute investment assets, investment cash and other investment benefits.

Capcom will also pay off Starcomms’ outstanding NCC obligations up to $13,000,000 in exchange for receiving the subscription shares and conditional share subscription rights.

Some shareholders commended the move and said it was timely.

Ambassador Olufemi Timothy, chairman of Renaissance Shareholders Association, said that was bound to restore hope to the company’s investors and prospects for returns on their investments in the future.

Nodding in agreement, Sir Sonny Nwosu, National Coordinator of Independent Shareholders Association of Nigeria said the Scheme had become imperative in view of the operational challenges of the company over the years.

He said that the coming of Capcom to save the company from imminent collapse is salutary to the efforts aimed at making the company to survive.

Earlier, Mr. Olusola Oladokun,  interim Chief Executive Officer of  the company, told the shareholders that the acquisition became imperative since the company had been  “facing operational and financial challenges on account of the shifting competitive landscape in Nigeria’s telecommunications industry.”

The challenges, he explained “have resulted in the company generating operational losses and functioning with unsustainable levels of debt and the reduction of weekly cash collections to unsustainable low levels.”

According to him, as part of the overall transaction with Capcom, both Helios Investment Partners, an African-focused private investment firm and AMCON, will acquire equity stakes in Starcomms derived from the Capcom shareholding on completion of the transaction.

Capcom is the special purpose vehicle solely created to make an equity investment into Starcomms and 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.

Starcomms has recently faced severe operational and financial challenges on account of the shifting competitive landscape in Nigeria’s telecommunications industry.