Madagascar’s Biggest Phone Company Telma Said to Seek Buyer

Telma Group, the biggest telephone company in the island nation of Madagascar, is seeking buyers, according to two people familiar with the matter.

The closely held company, which is based in the Malagasy capital of Antananarivo, is working with adviser Lazard Ltd. on the transaction, said the people, who asked not to be identified because the talks are private. Telma management may retain a stake in the company, which is valued at about $500 million, one of the people said.

African telecommunications markets are one of the few remaining opportunities for growth for international firms as the continent’s consumers increasingly use smartphones to access the Internet and services like banking. Qatar Telecom QSC and Emirates Telecommunications Corp. are among companies weighing bids to take control of Maroc Telecom, a Moroccan operator owned by France’s Vivendi SA. Groups including France Telecom SA have expanded their African footprint through deals in recent years.

Telma, which is led by Chief Executive Officer Patrick Pisal-Hamida, may achieve earnings before interest, taxes, depreciation and amortization of $80 million next year, helped by growth in mobile sales, according to one of the people. The company competes with Bharti Airtel Ltd. of India and France Telecom’s Orange brand.

A spokeswoman for Telma could not immediately comment.

Political Crisis

Telma, which has experienced a turnaround since it was privatized in 2004, has more than 1.8 million mobile clients, or 30 percent of the market, according to the 2011 corporate review on its website. The company had annual sales of $134 million in 2011, the latest data available, and has invested $230 million since 2004 to build infrastructure such as 8,100 miles of fiber optic cables.

With a population of 22 million, Madagascar’s gross domestic product grew by about 1.9 percent last year according to the Central Intelligence Agency.

Growth has been held back by a political crisis that began almost four years ago. In 2009, President Andry Rajoelina ousted elected leader Marc Ravalomanana after a series of protests. Last year, Ravalomanana announced he would abstain from running in the next elections, and he has been living in exile in South Africa as the Tanzanian government mediates talks to resolve the dispute.

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