Share transfer deal signed

The government told Tecom's negotiators from the outset that there was no way Smart City and Maltacom could be part of the same deal, according to Investments Minister Austin Gatt.

The minister was asked to comment in the light of a statement in The Times by Tecom's deputy CEO that he did not think the Dubai-based company would have done one deal without the other since they brought a number of synergies to one another.

Dr Gatt said: "As I have already said, they probably tied both things (together); we didn't tie them. And I made a clear statement at the start, with the negotiators that there is no way we would tie these things together. We can't help it if that's what they had in mind".

Maltacom's chairman and directors, who were serving their last day in office, were among those who witnessed the government officially hand over its 60 per cent stake in the company to Tecom Investments at the Mediterranean Conference Centre, in Valletta, yesterday in a deal worth €220 (Lm94.4) million.

Tecom's CEO Ahmad Bin Byat said the event heralded a new beginning for Maltacom and the Maltese economy and that Tecom had found a "strategic fit".

"Our investment in Maltacom has strategically combined Malta's geographic location with our experience in successfully establishing and growing ICT clusters. It has provided us with an ideal opportunity to become a focal point for expanding the ICT sector in the Mediterranean region...

"We believe in the company, in the Maltese and in the economy," he said.

A buoyant Dr Gatt said that, through the sale, the government was building on the nation's ICT pillar.

"The fact that we got Tecom gives us the best of both worlds: it gives us a strategic player with a lot of money. So we have a financial investor as well."

In a brief but enlightening presentation, Tecom's senior business development manager Nikil Patil said the company intended to use Maltacom as the catalyst "for sparking the development of Malta as one of the leading ICT-based economies in the region".

This would start by maximising the capabilities of fixed line as well as mobile telephony before moving on to quadruple play, which is a service bundle that includes high-speed data, telephony, TV, and wireless. It will invest Lm30 million in Maltacom in the first three years.

"Having developed a company that is forward-looking and has great products, we also need to create market demand... we believe the growth of ICT clusters in Malta would in return generate more demand for the products and services we are planning to deliver through Maltacom."

The ICT clusters, of course, would be provided by SmartCity@Malta, the Lm110 million IT village that will be built by Tecom on the site of the Ricasoli industrial estate. It is due to open its doors in 2008 and continue to expand till 2016, creating about 5,600 jobs in the process.

Meanwhile, Maltacom will provide the infrastructure that will enable large and small ICT and related companies to operate.

Under the agreement with the government, Tecom has agreed not to delist Maltacom from the stock exchange, increase its shareholding or sell any of its shares before January 1, 2009. Nor during that period will it impose any redundancies on Maltacom's 1,500 or so employees.

Tecom's reputation in the telecoms industry has grown rapidly in recent years. It has obtained the second telecoms licence in Dubai and controls the clusters at Dubai Internet City and Dubai Media City - the model for Smart City.

Last month, it also made a successful bid of €1.89 billion for a 35 per cent stake in Tunisia's public phone operator, Tunisie Telecom, and it has also become a strategic partner in Interoute, owner and operator of Europe's most densely connected voice and data network.

The Maltacom privatisation process started in July, 2004, when the Privatisation Unit appointed Lehman Brothers to act as the financial advisors. One year later an international call for non-binding offers was issued and in October of last year the government received five non-binding offers.

Two final binding offers, from Tecom and Ararco, were received in the final stage of the bidding process on January 16 before Tecom was awarded preferred bidder status last month.