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No done deal for Arivia.kom

Candice Jones
By Candice Jones, ITWeb online telecoms editor
Johannesburg, 04 Jul 2008

Speculation that the arivia.kom deal may well have been concluded has been vehemently denied by Transnet spokesman, Paulo Froes.

Sources indicated that one of the two bidders has been deploying arivia staff.

However, Froes says the companies involved are still in the process of due diligence and that no decision has been made as to which of the two bidders might be in line to take on the state-owned IT service provider.

Transnet and Eskom, which respectively hold 41.5% and 58.5% of arivia, have traditionally been tight-lipped on the privatisation of the company. At the start of the sales process, government included two five-year outsourcing contracts, worth around R400 million for Eskom and R200 million a year for Transnet.

Of the five companies who initially bid for arivia, it is believed only two companies are left in the running; namely Dimension Data and T-Systems.

ITWeb has received a memo, which is believed to be internal communication by T-Systems, saying the company is focussing its efforts on the arivia deal. However, the company could not confirm whether the communication was indeed a legitimate memo.

All the companies involved are under strict non-disclosure agreements, as such, the company cannot comment on the deal process.

Dimension Data could not be reached for comment to confirm whether the deal had been concluded at the time of publication.

The Department of Public Enterprises initially said the sale of arivia was scheduled for completion by the end of last year. However, it was later pushed forward to March this year.

In April, Transnet CEO Maria Ramos confirmed that the deal was again delayed. "The two companies are still busy with the due diligence process, but this should be completed within the next two or so months. We are expecting to have everything finalised by September of this year; I am confident that we can conclude the deal by this new date," she commented Ramos at the time.

Ramos denied that operational problems surrounding arivia's majority shareholder, Eskom, were slowing down the process any further. Instead, she said the deal was seeing movement.

"We are trying to extract the maximum value for our stake in arivia. That is why there have been delays. I want a good deal. For the same reason, I won't tell you how much I hope to get for arivia. I want the maximum possible and putting our views out in the market could limit our ability to do so," she explained.

Related stories:
Arivia deal shrinks
Uncertainty surrounds arivia sale
End of the road for arivia deal?
New sale date for arivia

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