NedTel Cellular and Nashua Cellular have released details of the planned merger announced in March. The deal puts Nashua Cellular parent, Reunert, as the controlling shareholder of the new entity.
Reunert and Nedcor will merge their cellular interests to create a new company, which directors of both holding companies say will have added clout in the competitive cellular environment.
Reunert will dispose of Nashua Cellular as a going concern in return for 58% of the new entity; a stake which it says has an estimated value of R330 million. Nedcor will control 37.3% and Metropolitan has control of the remaining 4.7% of the new concern.
The new company will be headed up by Simon Herbert, currently the MD of NedTel Cellular.
The deal is affective as of 1 July and will have no material affect on headline earnings or net asset value for either Reunert or Nedcor shares as of the effective date.
NedTel Cellular and Nashua Cellular are both suppliers of cellular services and hardware. The rationale behind the merger is to combine the distribution networks to provide the new entity with a country-wide distribution capacity.
The new entity aims to become the largest (20% of the market) independent dual-service provider targeting the corporate cellular contract market. This should, according to the parties, give the new entity a 12% market share of the total cellular contract market.
Nedcor plans to use the new entity to market its mobile banking products, especially its Wireless Application Protocol technology banking facilities, which went live in April.
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