TNM await decision from potential partners

Board chairman of the Malawi Stock Exchange (MSE) listed company, professor Mathews Chikaonda, has assured the shareholders and the public that all efforts will be made to communicate further developments when and as required.

He said with such expression of interest, they have since entered into discussion with the partner whose identity has been tightly concealed and that the outcome might affect the TNM share price.

"Shareholders are therefore advised to accordingly exercise caution in dealing in their shares in the company until a further announcement is made," he said.

It is not clear whether the announcement has assisted the company's share price to gain as of Monday 3 October 2011. TNM plc and Standard Bank of Malawi share price gained making the two counters that made positive movement on the local bourse. Market analysts are attributing the behaviour of the counters to demand for their shares from investing public.

For TNM it is a wonder, considering that the company has not yet said whether the potential partner is based in the country, on the continent or outside Africa and the defiance to the thin trading that has been experienced on the market.

TNM gains shares

The market report for the week ending 30 September 2011 indicates that TNM, which is the only telecommunication company on the local bourse, gained by one tambala to finish at K1.90 per share on the close of the week with buyers exchanging more than 800 000 shares.

The announcement of a potential partner perhaps brings to an end a search the company engaged into since March 2010, when they it first announced that it was looking for a strategic equity partner, only to suspend the hunt a few months later.

Value of shares can be enhanced

The explanation Chikaonda gave, after the suspension of their first quest for a partner, was that the directors and major shareholders were of the view that value of shares can be enhanced through maintaining the status quo in the ownership structure in the short-term to medium-term, while awaiting the potential upside benefits of a number of positive developments emerging in the telecommunications landscape in the region.

Prior to the announcement he had said they had narrowed down to four companies from within and outside Africa with credible international repute.

"We are looking for a company with international reputation and established brand name to bring the value in the company and easily uplift the telecommunication standards in Malawi,"
Chikaonda was quoted as saying.

While at that time shareholders were willing to part with between 25 and 51% of the shares to the new partner, this time round no information in this regard has been released yet. The company is not struggling and this is enough attractive aspect to any potential partner considering that in the half-year ending June 2011 it posted a 42% increase in profit-after-tax to K587 million from K412 million the same period last year.