First Business News Portal in English from Nepal
KATHMANDU: Ocean Cable and Communication (OCC Corporation), a Japanese manufacturer of communication infrastructure, is all set to acquire Nepali telecom firm, Smart Cell, at Rs 12 billion.
The Yokohama-based manufacturer of submarine communications cable and Smart Cell have reached a sales-purchase deal to this effect on February end and top level officials of both companies were involved in the agreement process.
As per a high level government source that Fiscal Nepal met, Sarbesh Joshi, chairman and executive director of Smart Cell Telecom and Satish Lal Acharya, a promoter of Smart Cell inked the agreement on behalf of Nepali firm while Tomokazu Ito, president of OCC Corporation and its director Takato Nishida signed the agreement document on behalf of Japanese firm.
Sources met by Fiscal Nepal also confirmed that both Smart Cell and OCC Corporation have agreed to carryout due diligence audit (DDA) of Smart Cell as soon as possible.
Execution of this agreement between the two firms will ensure foray of a new telecom company with foreign investment in Nepal. There are six telecom firms currently operating in Nepal and Ncell is the only telecom company with majority of foreign stake.
However, it is learnt that OCC Corporation wants Smart Cell to clear its due to the government and come out of its current controversy in Nepal as soon as possible. Along with this, the Japanese firm has also asked Smart to clear its other liabilities, including bank loans before start of the DDA process.
Smart Cell, which has limited stake in the domestic telecommunication market but is the third largest telecom firm of Nepal with 2.2 million GSM customers, is facing controversy since long for not paying/delaying its outstanding due to the government.
The company is yet to pay almost Rs 4 billion to the government. The due fees are for frequency fees, license renewal fee, Royalty fee, and RTDF fees, among others.
Of late, the government has frozen assets of Smart Telecom for not clearing its dues. The Cabinet has restricted Smart’s transfer of assets and shares after the company failed to pay the ninth instalment of its dues which should have been paid by mid-July last year.
However, Smart Cell had informed the government regarding its preparation to bring in foreign investor by mid-July and requested the Ministry of Communications and Information Technology (MoCIT) to give the company mid-July time to settle its outstanding due to the government.
Accordingly, the Cabinet has given Smart mid-July time to clear its remaining dues and halted the telecom firm from transferring its share without consent of the government. However, Smart Cell has not informed the government regarding its latest agreement with OCC Corporation.
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