For Online E-newspaper
The East African : Sep 1st 2014
60 AUGUST 30 - SEPTEMBER 5, 2014 BUSINESS, MARKETS AND FINANCIAL ANALYSIS THE MARKET WHISPERER EQUITY MARKETS (WEEKLY CHANGE IN BENCHMARK INDEX) NSE 20 Share Index Kenya 5,139.39 2.21% (CUMULATIVE MOVEMENT) DSE All Share Index Tanzania 2,417.52 0.29% USE All Share Index Uganda 1,760.00 0.23% RSE All Share Index Rwanda 143.20 -0.15% JSE All Share Index South Africa 50,922.38 -1.00% NGSE All Share Index Nigeria 41,532.33 0.00% ture to Eaton Towers Ltd in a $181 million deal, the largest acquisition in East Africa this year. Under the terms of the Ai≥tel, Eaton in $181m towe≥s deal A ETL is majority owned by irtel Uganda is to sell part of its infrastruc- Capital International, a private equity fund, with an 86.9 per cent stake, while ADP I Holding owns 10 per cent. The Eaton management owns three per cent of the company. deal, Eaton will buy 576 towers from Airtel Uganda and immediately rent them out to the mobile operator. Eaton is also expected to operate and maintain the towers. To finance the deal, Ea- ton is expected to borrow some $18 million from the IFC, restructure its debt and increase borrowing from its senior lenders by $36 million. “Eaton has agreed to ac- quire 576 existing tower sites from Airtel Uganda, which will bring the total number of Eaton towers in Uganda to 1,291. This will help the company to expand its network in Uganda and is expected to increase its profitability,” said the IFC in disclosures posted on its website. Eaton will buy 576 towers from Airtel Uganda and immediately rent them out to the mobile operator. Over the past few years, mobile operators across Africa have been relinquishing either the ownership or control of their towers across the continent as they look at ways of cutting costs as well as freeing tied up capital to invest in new areas. The need to outsource tower operations is amplified by falling voice revenues amid increased competition from newer business models such as mobile virtual network op- erators. Tower operators, using the economies of scale from operating multiple towers, are also able to help mobile companies share masts, lowering their cost of doing business. Normally, in areas with multiple towers, it is estimated that erecting a single tower can cost an average of $250,000. Consulting firm KPMG estimates that leasing towers from third parties can help mobile operators cut their tower operation costs by as much as 20 per cent. Last year, France Tele- com sold 2,000 mobile towers across Côte d’Ivoire and Cameroon to IHS Holding Ltd, the Africa-focused infrastructure group. In 2012, the company also bought some 1,800 towers in the two countries from MTN, the South African-listed telecoms group, for $180 million. Etisalat Nigeria, another A telecommunications tower in Tanzania. Eaton plans to acquire 576 tower sites from Airtel Uganda, bringing its total number of towers in the country to 1,291. Picture: File major operator, last week also announced the sales of 2,136 of its towers to IHS. T≥ouble b≥ewing fo≥ Rwandan bee≥ make≥ RWANDAN BREWER Skol is back to the drawing board three months after launching its products in the Ugandan market. The brewer, which concedes the market has proved tough, says incumbents Nile and Uganda Breweries that control 99 per cent of Uganda’s beer market, responded to its entry by giving huge discounts and other incentives to bar owners to keep out its brands. “There are markets we normally go to and penetrate with ease, but Uganda is not one of them. The beer market here is very competitive and the big producers give a lot of discounts, goodies, and other incentives to bar owners to sell their brands,” Alex Muganwa, a director at Skol, told The EastAfrican. Skol introduced two of its brands — Skol and Virunga Mist — to the Ugandan market in June this year, as it sought to tap into the regional beer market, but its visibility has remained minimal. Mr Muganwa said that Skol is also facing a shortage of bottles because of the need to truck empties back to Rwanda for refilling, which has slowed down Skol’s penetration of the Ugandan market. The firm now plans to carry out marketing campaigns in Uganda in the next three months starting September to raise its brands’ visibility. Skol’s search for new markets in the region came at a time when Rwanda’s revenue from beer exports to the DR Congo was expected to tumble following the introduction of new taxes by the latter to protect its local industry. Skol has invested over $15 mil- lion in its brewery, including purchasing equipment and packaging for capacity expansion and tripling its production to 300,000 hectolitres. The demand for beer in Rwanda is estimated at 1.2 million hectolitres annually. Bienfait Bitenyo, a director at Skol, said the firm currently accounts for 15 per cent of the Rwandan beer market, with the rest largely dominated by Bralirwa. Uganda’s UBL and NBL produce a combined 3.85 million hectolitres per annum of beer, with the latter accounting for more than half of this figure from its plants in Jinja and Mbarara, which produce 2.45 hectolitres annually. Skol Brewery, formally known as Brasserie des Mille Collines (BMC), is a subsidiary of Belgian beer maker Unibra. Published at Nation Centre, Kimathi Street, and Printed at Mombasa Road, Nairobi by Nation Media Group, Box 49010, GPO Nairobi, 00100. Registered at the GPO as a newspaper. Nairobi Office, Tel: 3288000, 211448, 337710, Fax 214531, 213936. Dar es Salaam Office. Tel: 2119657/8. Kampala Office, Tel: 232771, 232772. Fax 232781 Download free QR Readers from the web and scan this QR (Quick Response) code with your smart phone for pictures, videos and more stories Qata≥’s inte≥est in Kenya deepens KENYA IS seeking to deepen its relationship with Qatar. Last week, officials from the Gulf country were in Nairobi reciprocating a visit by President Uhuru Kenyatta. Sources familiar with discussions say the Qataris expressed interest in the energy and real estate sectors, although the government is said to have presented opportunities in the Lapsset project to them. Indeed, in energy, the Qa- taris are big. Early this year, the Kenya Electricity Generating Company (KenGen) said it will collaborate with Qatari firm Nebras Power to build a 500MW gas power plant in Mombasa. The Middle Eastern country has also offered to sell gas to Kenya at a concessionary price. In April, the two countries signed a double taxation agreement that was seen as crucial in making Kenya attractive to investors from Qatar. QNB Capital, owned by Qatar, was one of the banks that arranged Kenya’s maiden $2 billion sovereign bond.
Aug 25th 2014
Sep 8th 2014