June 1, 2015—The Kiribati government has sold Telecom Services Kiribati Ltd. (TSKL), the state-owned telecommunications monopoly, in a privatization move for which Nathan Associates Inc. advised the island nation.
The government of the Republic of Kiribati completed the sale of TSKL to the Fijian company Amalgamated Telecom Holdings Ltd., owner of Vodafone Fiji, on May 26. Amalgamated had made the winning bid of AUD$7.5 million (US$5.7 million) in cash and assumption of TSKL’s debt of AUD$670,000 in an open and transparent process.
The amount equals more than 4 percent of Kiribati’s gross domestic product, making the transaction the largest privatization sale in Kiribati. Studies show that the benefits from privatizations are even higher for consumers, increasing the availability, quality, and variety of service while lowering prices.
Nathan Associates was the government’s lead adviser, working in association with SINTRA Consulting of Potomac, Maryland, and the Washington-based law firm Cameron LLP. The Nathan team conducted the due diligence on TSKL and presented the government of Kiribati with several options for attracting private capital to the company.
The team then performed the business valuation, structured the transaction, developed a sale strategy, promoted the sale among potential investors, developed the bidding rules, advised the government on the prequalification of potential bidders, developed the transaction documents, and advised the government during negotiations with the potential bidders up to the sale’s closing.