Seychelles Pension Fund invests in Cable & Wireless |21 November 2019
Seychelles Pension Fund is buying into the country’s largest telecommunications company as part of a strategy to diversify its investment portfolio.
The investment is for a consideration payment of US $24 million for 20% share ownership in Cable & Wireless of Seychelles.
In a communique released yesterday, SPF writes that the decision to purchase shares in Cable & Wireless of Seychelles (CWS) follows detailed investment appraisal including due diligence, financial assessments and approvals through its finance and investment committee and Seychelles Pension Fund’s (SPF) board of trustees. The consensus among the board of trustees was to turn CWS into a company that would work for the benefit of not only the shareholders and the staff, but for the national interest as a whole.
According to SPF chief executive Lekha Nair, investing in one of Seychelles’ most reliable and profitable companies is a chance that SPF could not pass up in view of its long-term investment strategy.
“The telecommunications sector is new for SPF and is always evolving, looking into the future,” Mrs Nair said.
“For any country, it is a vital growth industry that we forecast will continue to yield a good return on investment, especially with CWS’ track record and market positioning that reinforces that belief,” added Mrs Nair.
CWS was acquired from Liberty Latin America (LLA), by a consortium of Seychellois, who offered a 20% equity share to the SPF once the transaction was closed. The acquisition process was concluded on November 6, 2019 under the formation of a special purpose vehicle, CWS Investment Limited (CWSI), to ease the transaction on the side of the new owners and to satisfy any other capital raising needs.
The 20% shareholding of SPF will be in CWSI, with 57% owned by SWC and the remaining 23% worth of equity capital expected to be offered to the general public.
The investment in CWS would translate in SPF achieving in 2019 a more diversified investment portfolio, three years earlier than anticipated. This diversification in investment was planned to be achieved over the medium term, 3-5 years beginning 2019, by buying more equities and disposing of residential properties. Investment in CWSI is expected to yield a minimum dividend of 6% from the year 2020, which in addition to capital gains, fits in well with SPF’s strategy and target for all its investments, to be in the range of 7% return, with capital gains. The capital gains are expected when CWSI is listed.
This latest investment by SPF is in line with its investment strategy of growing the fund and is also another opportunity for the Seychellois people through SPF to take part in share-ownership of a well-established private company in Seychelles with a long history.
SPF’s other investments in the domestic sector include 26% shares in Seychelles Breweries, 36% through OICL in SACOS, 9% in Seychelles Commercial Bank, 30% in Al Salaam Bank of Seychelles and 10% in Central Common Cold Storage (CCCS). All of SPF’s investments are based on good returns with capital preservation ensuring long-term growth, to provide all its members and their dependents with a pension for life on retirement.
Communiqué from SPF