Axiata may acquire stake by first half of '16
Kathmandu, January 26
If things go according to plan, TeliaSonera will sell its stake in Ncell, a cellphone company in operation in Nepal since 2004, to Malaysia-based Axiata within the first half of 2016, marking the biggest ever buyout deal in Nepal’s corporate history.
TeliaSonera has said it is making a departure from Nepal as part of its plan announced in September to reduce its presence in seven Eurasian markets and focus on operations in the Nordics and Baltics.
However, many say continuous problems faced by TeliaSonera in repatriating earnings had also prompted it to make an exit from Ncell.
TeliaSonera has been seeking to repatriate around Rs 11 billion that it had earned till fiscal year 2011-12.
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However, Nepal Rastra Bank (NRB) has not allowed TeliaSonera to send the money abroad ‘due to lack of documents to substantiate flow of foreign investment into Ncell’.
“We allow foreign companies to repatriate dividend based on funds that they have brought into the country. We have been asking Ncell to submit proof of foreign investment that has gone into the telecom company. But so far it has not been able to do so,” NRB Governor Chiranjibi Nepal told the parliamentary committee meeting. “Without these documents, we cannot release the dividend because we are bound by international laws to strictly monitor such transactions and fund outflows.”
Ncell has a paid-up capital of around Rs 100 million.
“Of the total capital, 80 per cent, or around Rs 80 million, comprises foreign investment. But the company, so far, has submitted documents to substantiate inflow of foreign funds of around Rs 60 million. We need more documents that prove 80 per cent of the fund that went into Ncell had come from abroad,” said Bhisma Raj Dhungana, head of Foreign Exchange Management Department at NRB.
An employee of Ncell, who spoke on behalf of CEO Erim Taylanlar, said: “The company has been submitting documents as demanded by NRB since 2013. Also, corrective measures that could be taken are being discussed with the central bank.”