18 May East Africa: Zuku Owners to Sell Corporate Internet Division
Telecommunications firm Wananchi Group Holdings Ltd has entered into an agreement to sell its three subsidiaries — SimbaNet, Wananchi Telecom and iSAT– to Synergy Communications (Syncom) after prolonged boardroom wrangles that had threatened to stall the sale.
The development follows revelations that Wananchi Group, owners of pay-TV and Internet service provider Zuku, is planning to lay off workers from next month in a cost-cutting move as the company restructures its business.
The firm has been facing financial challenges as a result of stiff competition in the pay-TV market posed by South Africa’s DStv.
The sale of the three businesses, which are part of the Wananchi Business Services – a unit that deals with corporate Internet provision, is expected to raise additional capital to strengthen the company’s better performing divisions.
“The decision by the board to sell Wananchi Business Services has been guided by a desire to deepen Wananchi Group’s products and services portfolio within the retail service segment,” said Alex-Handrah Aime, the Wananchi Group’s chairperson.
The company was to sell off the unit in 2015 but legal battles amongst the shareholders held back the sale process.
SimbaNet is a licenced public data operator; iSAT is a satellite teleport service provider, while Wananchi Telecom is a tier one data communications carrier.
“The proposed acquisition of the units presents a tremendous opportunity for business growth and investment,” Syncom chief executive Geoff Hardwick said in a statement Tuesday.
“The focus on corporate and enterprise customers perfectly fits our goal of providing high quality, enterprise communications services and products across the sub-Saharan region,” he added.
Wananchi and Syncom however did not disclose the cost of the transaction, which is still subject to regulatory approvals in the countries of operations.
Source: The East African