Nigerian telecom exit nets ECP 2.9x

The Africa-focussed firm made proceeds of some $99m in a private placement preceding Starcomms’ listing on the Nigerian Stock Exchange. Emerging markets focussed-Actis also exited its investment in the company.

Emerging Capital Partners has made 2.9 times its original investment in Starcomms, a Nigerian mobile telecommunications operator.

The Africa-focussed private equity firm sold its position in the company via an N64.35 billion ($547 million; €348 million) private placement preceding a listing on the Nigerian Stock Exchange, the first such listing of a telecom company.

The transaction resulted in proceeds of approximately $99 million (€63 million), according to an ECP statement.

ECP said it has invested a total of $34.3 million in Starcomms since 2005, when it teamed with emerging markets-focussed firm Actis to acquire a majority stake in the company for $43.2 million.

Via separate statements, ECP and Actis said they helped the company expand its telecom infrastructure and subscribers from 100,000 to 1.5 million.  It is Nigeria’s largest CDMA 3G mobile operator, and the country’s fourth largest telecom operator.

The investment by was made through the firm’s AIG African Fund Infrastructure Fund, which closed on $407 million in 2000.

Actis did not disclose its returns information on the deal. The firm also recently had a partial exit of its $25 million investment in Nigerian food conglomerate UACN, made in 2005. Actis said it has sold a portion of its 20.5 percent stake to an intuitional investor, but disclosed no other details.