Private equity investors commence negotiations
6 September 2006
Private equity investors commence negotiations for capital injection into Econet Wireless New Zealand Limited
Econet Wireless New Zealand (EWNZ) has announced it has signed a binding MOU with two large, private equity investors, GEMS (General Enterprise Management) of Hong Kong and CVP (Communication Venture Partners) of London, to consider a significant nine figure equity investment into EWNZ.
The signing of the MOU signals the start of due diligence and further appraisal of the regulatory environment in New Zealand, to facilitate building a competitive, larger nationwide mobile network.
Zachary Wazara, Group COO of Econet Wireless Global commented, “We knew this would be a tough road when we arrived in New Zealand, given the entrenched position of the incumbents and the lack of proper competition rules. Through perseverance and a healthy relationship with our shareholder partners Hautaki, we have built a tremendous momentum to rollout a desperately needed third operator in New Zealand, so it may move up the OECD league tables. We are looking forward to an ongoing participation in the company.”
Bill Osborne, Founding Chairman of Econet New Zealand and Chair of Maori investment group Hautaki, commented, “It has been a long and at times challenging process and the competitive playing field still has some way to go before any real competition has a hope of surviving in New Zealand. Once the playing field is leveled up in line with other OECD countries, Maori will be a significant shareholder in a nationwide network. This initiative will benefit all New Zealand consumers, even those who chose not to move to the Econet network.”
Andrew Scott, Director of CVP in London, commented, “It has been five years since we first looked at New Zealand, but now with the expectation of amendments to the 2001 Telecommunications Act to facilitate competition we can consider becoming a significant shareholder.”
Fergus Wilmer, Executive Director of GEMS, commented, “New Zealand has opened itself up for greater telecommunications investment now that the government has declared its willingness to consider proper OECD-style telecommunications rules. GEMS has been particularly encouraged by the Commerce Commission’s review of the mobile market.”
This announcement builds on previous milestones announced by Econet, including the announcement of the relationship with Chinese technology supplier, Huawei, in December 2005. It also builds upon Econet’s longstanding and consistent public policy position – the alignment of New Zealand’s mobile telecommunications regulatory environment with that of other OECD countries.