Starcomms new owners target $100m revenue in 5 years
Starcomms projects an EBITDA (Earnings before Interest, Taxes and Amortisation) of $100m in the after the completion of the consolidation of the telecoms firm. next five years
Chief Executive Officer designate for Starcomms, Mr. Dem Elesho, gave this projection at a press conference in Lagos, on Monday.
Elesho is currently the CEO of Capcom, which is about to complete a $210m takeover of Starcomms.
Elesho said Capcom's current business plan was such that the new Starcomms would generate an EBITDA of $100m in the next five years.
The CEO designate, said Capcom's significant cash and asset investments totalling $210m as well as the additional operational and technical expertise would reposition Starcomms for future growth.
He said, 'The opportunities for data providers in Nigeria have only started to be tapped. By combining additional spectrum from Multi-Links and MTS with the existing network and subscriber base of Starcomms we believe we can quickly create Nigeria's leading provider of mobile broadband through an industry-leading '4G'-LTE network.
'This can only be good news for Starcomms' loyal customers, partners, staff and shareholders and I and our whole team look forward to the challenge of building Nigeria's new Broadband Internet champion.'
With an outstanding debt of N15.1bn as at the third quarter of 2012, Starcomms and the entire Code Division Multiple Access operators in Nigeria have been facing financial difficulties which could lead to insolvency without new investments
The management of Starcomms, therefore, evaluated the company's options and strongly believed that the proposed transaction with Capcom represented the only opportunity for Starcomms to continue to trade in the long-term.
Capcom will inject $98m of cash and $112m of independently valued assets into Starcomms.
After the approval of the transaction by Starcomms shareholders on December 28, 2012, Capcom will take full control of Starcomms.
As part of the move to complete the consolidation of Starcomms, the CDMA operator said it had began posting documentation relating to Capcom's proposed investment into the company to shareholders.
Speaking also on the transaction, the interim CEO, Starcomms Plc, Mr. Olusola Oladokun, said, 'Starcomms has experienced significant challenges over the past two years, at the heart of which have been the changing competitive and operational dynamics of the Nigerian telecommunications industry, especially in the voice business.
'As a result, the Board of Directors has been considering a number of options to reposition the company for growth. After a careful consideration, we believe that the investment by Capcom, which will provide the capital required for continued operations as well as enabling investment in new technology, combined with the injection of new spectrum and the CDMA assets of Multi-links, creates the best possible platform for Starcomm's future. We strongly recommend - and look forward to - the transaction being approved by our shareholders.'