Demola Elesho Resurfaces As CEO, Starcomms, Reveals Investment Plan
Demola Elesho, one of Nigeria’s leading lights at MTN Nigeria until he pulled out from South African telecoms giant, has resurfaced as CEO of leading CDMA operator, Starcomms.
Starcomms which has been dogged by inadequate financial infusion into the company recently struck an agreement with Capcom with a view to raising the much needed funds to improve the lot of the company.
Capcom is a special purpose vehicle solely created to make an equity investment into Starcomms Camcom has revealed an ambitious turnaround strategy for the troubled telecom operator including a significant cash and asset investment.
Backed by some of the best brains in the telecoms industry, Capcom also plans to establish Starcomms as Nigeria’s leading 4G Broadband data provider- a plan hinged on the enhanced spectrum from the post transaction.
Demola Elesho, new company’s chief executive officer said that Capcom’s interest in Starcomms is primarily driven by the exciting opportunities the proposed spectrum combination brings.
Capcom was established in 2012 with money raised from investment and hedge funds, family offices and industry partners with years of commercial experience in emerging markets, especially Africa.
The company consists of MBC -a private trust with a focus on investing in emerging markets; OldonyoLaroEstate -a private family office based in Kenya with over 40 years’ experience of investing in Africa across numerous industries; Helios Investment Partners -an Africa-focused private investment firm which manages funds in excess of $1.7billion; and AMCON -the Asset Management Corporation of Nigeria.
According Elesho, Capcom will fund the transaction through a mixture of equity, debt and asset sales.
As part of the transaction Capcom will raise $50million of equity from a limited number of key investors and the equity is expected to be fully raised and deposited into escrow pre AGM.
The company also said that additional funds will be provided through a $62 million loan from Afreximbank while part of the transaction funding will be raised from the sale of Multi-links’ fibre assets to Suburban FiberCo.
With the huge financial war-chest, Capcom said the new management would work to attract more highly profitable data subscribers in the short term.
Ultimately, it plans to launch high speed 4G mobile broadband services in the next 12-18 months.
It is hoping that the cash injection will provide the financial security needed for Starcomms to embark on this strategic realignment.
With the money available, Capcom also hope to fund the technical integration process, new capex and continuing short term operating losses.
The expectation is that following a successful integration and stabilisation period, the planned roll-out of 4G services will open up significant opportunities for the new Starcomms
Capcom’s current business plan anticipates that the combined business will generate over $100 million of annual EBITDA within five years.