Ncell Becomes a Public Company, Soon To Issue Shares
August 5, 2020 | Investopaper
The way has been opened for Ncell, one of the largest and most profitable companies in Nepal, to issue shares to the public. The Office of Company registrardecided to change the ownership structure of Ncell on Monday, making it easier for the company to move forward in the share issuing process.
The office had earlier decided to allow a company serving as Ncell Pvt. Ltd. to transform from a private company to a public company. At the same time, the name of Ncell, the largest telecommunication service provider in the private sector, has been changed to Ncell Axiata Limited.
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Ncell had received permission from the Nepal Telecommunication Authority (NTA) to operate mobile services on Bhadra 16, 2061. At that time, Spice Nepal Pvt. Ltd. had started telecommunication service in the name of ‘Mero mobile’. Swedish Telecom Company TeliaSonera purchased ‘Mero Mobile’ from Spice Nepal and changed the name into ‘Ncell’.
Sale Of Ncell By TeliaSonera To Axiata
TeliaSonera, the main investor, announced its decision to sell its 60.4 percent stake in Ncell to Malaysian company Axiata for $1.33 billion on Poush 6, 2072. After the decision, 20 percent shares of Niraj Shrestha, who was a local partner in Ncell at that time, were also sold to Bhavana Singh Shrestha, a local partner chosen by Axiata.
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The remaining 19.6 percent stake in Vizer Capital was later sold to Axiata. Accordingly, Axiata currently owns 80 percent of Ncell and local partner Shrestha owns the remaining 20 percent. Axiata had brought the company under its control in Baisakh 2073 BS by completing all the work related to the purchase of Ncell shares.
The process of converting to a public company was in disarray after a long-running dispute over the capital gain tax that Nepal would receive from the sale of shares from TeliaSonera to Axiata. The structure of Ncell has been transformed after more than a year of legal transformation into a public company last Baisakh.
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As the largest institutional taxpayer in the country, Ncell has an average annual income of over Rs 50 billion. It currently has 15.9 million mobile subscribers. The total number of Internet users is over 6.4 million. Of those, about 3.7 million are 4G users. Ncell has a market share of 42.11 percent in Nepal’s telecom market.
