M&A

3 November, 2009

UPDATE 1-Ghana says will not abrogate Vodafone deal

(Adds details and background)

ACCRA, Nov 3 (Reuters) - Ghana has no intention of abrogating Vodafone Group Plc's (VOD.L) $900 million purchase of a 70-percent stake in Ghana Telecommunications (GT), the government said on Tuesday after a review of the deal.

"Government ... has no intention of abrogating the SPA (sale and purchase agreement)," it said, two weeks after a government committee ruled the agreement illegal in a move that unsettled investors in one of West Africa's most developed economies.

The deal by the British mobile phone company in August last year was harshly criticised in parliament at the time by the National Democratic Congress, which came to power in January.

The committee argued the price was too low, that the government did not receive an adequate return and that Ghana should have retained Ghana Telecom's national fibre-optic cable as a strategic asset.

In a communications ministry statement, the government said it agreed with a ministerial review's conclusion that future talks should be handled by technical experts and negotiators, and that it should now "re-engage" with Vodafone management.

"The re-engagement would also include issues relating to the operation of the National Fibre Optic Backbone," it said, stressing it should be an "open-access network that serves the whole country with competitively-priced services."

The possible return to the government of some GT investments including landed properties and other assets, it added.

(Reporting by Kwasi Kpodo; Writing by Mark John; Editing by Phil Berlowitz, Bernard Orr)

Source: http://www.reuters.com