Vodacom acquisition of EWN 'still alive`

Johannesburg, 19 Feb 2004

Econet Wireless Nigeria (EWN) has moved to dispel rumours that its planned acquisition by Vodacom South Africa has been aborted.

According to a press release issued by EWN, it has become necessary to clarify this against the backdrop of an affidavit filed in the Federal High Court in Lagos by EWN, which the applicant in the case, Econet Wireless International (EWI), apparently took to mean that the negotiation process for the investment had been aborted.

EWN says the true situation is that it and Vodacom have decided to discontinue the original transaction structure, which entailed a direct subscription of 40 million shares and a further 20 million shares from existing shareholders.

According to EWN, the details of the new structure that the two companies are working on cannot be made known at this stage due to a confidentiality clause, but the transaction is expected to be concluded in the next few weeks.

An arbitration process was instituted by EWI after it claimed its preferential rights to acquire further shares in EWN were ignored, with the Nigerian company instead offering the shares to Vodacom SA.

According to EWI spokesman Kevin Kachidza, EWI understood that it was EWN`s contention that the process had been aborted, but the fact that they are instead working on a new structure will not affect the arbitration process.

"Clever corporate financial structuring will not circumvent the arbitration process in any way, and the results of the process will still be binding on all parties," says Kachidza.

"The clarification from EWN on their position regarding the proposed Vodacom acquisition is good, but it definitely doesn`t alter the strength of EWI`s legal position."