Zimbabwe government's hostile takeover bid for a controlling stake in Telecel Zimbabwe Ltd, a unit of wireless provider VimpelCom Ltd, is said to have reached an advanced stage.

ICT Minister Supa Mandiwandzira confirmed on Monday that his government was keen to acquire the mobile operator.

"Negotiations are still in progress," Mandiwanzira told ITWeb Africa in a telephone interview last week. He did not divulge when the deal will be sealed saying only that "everything was now under control and watch the space."

The government launched a hostile bid for Telecel using internet services provider Zarnet, founded in 1997 as a provider of ICT solutions.

In a bid to fight off rival consortiums, government manoeuvred to get control of the process by threatening to cancel Telecel's licence.

Authorities subsequently cancelled the licence alleging that Telecel had failed to pay US$137,5 million in licence fees. The licence was only restored on 7 May after a bruising legal battle.

The government wants to secure 60% control in the country's third largest mobile operator by buying out international telecommunications giant, VimpelCom, Mandiwanza said.

However, the takeover attempt is unlikely to be straightforward. Telecel has formally rejected the government's undisclosed acquisition offer, but is set to begin negotiations with unsolicited suitors, adding heat to the takeover bid that the government initiated in May.

Financial advisory and equity investment company, Brainworks, along with Masawara, Old Mutual, CBZ and the National Security Authority are believed to be interested.

A Zimbabwean consortium made up of a number of local companies and investors control 40% of Telecel.

The acquisition of the stake, owned by Empowerment Corporation (EC), has been complicated by infighting over shareholding.

Sources within the company claim that on 27 March a local legal firm had engaged EC shareholders, including James Makamba. through his company, Kestrel Corporation, as well as Jane Mutasa (Indigenous Business Women Organisation), Leo Mugabe (Integrated Engineering Group) and Phillip Chiyangwa (Affirmative Action Group) - all of whom had allegedly agreed to sell their stake at an agreed price.

Telecel spokesperson Francis Chimanda did not respond to questions emailed to him at the time of writing.

Telecel Zimbabwe was established in 1998 to operate a mobile phone network. The company's growth has been hindered by internal disputes which led to an exodus of directors.