Maravi

Govt finally sells Zamtel’s 75% shares to Libyan firm

Govt finally sells Zamtel’s 75% shares to Libyan firm
By Fridah Zinyama
Sun 06 June 2010, 04:01 CAT

Ministry of Finance head of public relations Chileshe Kandeta (c) with finance minister Situmbeko Musokotwane and Lap Green executive director Abdulbassat Elazzabi (r) during the signing ceremony at the Ministry of Finance in Lusaka yesterday - Picture by Thomas Nsama

THE government has finally sold Zamtel’s 75 per cent shares to a Libyan telecommunications network called Lap Green at a cost of US $257 million.

Zamtel’s partial privatisation had raised a lot of questions, following the total disregard to procedure that then transport and communications minister Dora Siliya had taken to choose RP Capital to value Zamtel’s assets.

Announcing the privatisation of Zamtel at the Ministry of Finance offices yesterday, finance minister Dr Situmbeko Musokotwane said Lap Green had agreed to pay a total consideration of US $257 million for the 75 per cent equity in Zamtel, which values 100 per cent of the equity in the company at US $343 million.

“This is an excellent price, but also a fair price, given the opportunity that lies before Zamtel,” he said.

Dr Musokotwane said in addition to the US $257 million, Lap Green had agreed to provide US $62 million in additional funding, to finance part of Zamtel’s network expansion programme going forward, and taking over government guarantees relating to a further US $75 million in vendor financing, covering Zamtel’s existing network expansion projects.

“In total, therefore, their total commitment to Zamtel is US $394 million,” Dr Musokotwane said. “The government will retain 25 per cent of Zamtel, and will continue to have an active role in management and direction of the company going forward, retaining two seats on the board out of a total of seven, and veto rights relating to certain key decisions.”

Dr Musokotwane, however, said the government recognised the experience and expertise of Lap Green, and could therefore afford them management control of the business.

“One of the key objectives of the government in the privatisation of Zamtel was to ensure that the employees of Zamtel are properly looked after,” he said. “We know that a substantial programme of the redundancies is a regrettable but necessary reality if Zamtel is to be turned around.”

Dr Musokotwane said of the US $257 million, the government would ensure that a very substantial part is allocated to the settlement of the full redundancy packages for Zamtel’s 2,341 employees, as agreed with the unions’ representatives.

“Independent auditors have been appointed to ensure that the package for every single employee is correct and paid in full,” he said.

Dr Musokotwane said it is Lap Green’s intention to subsequently rehire a significant portion of the workforce, and begin the important business of returning Zamtel to growth and profitability.

“I can’t over state the importance of this element of the transaction,” Dr Musokotwane said. “What it means is that all the 2,341 employees will be given a lump sum, proportionate to their pay grade and tenure at Zamtel.”
Dr Musokotwane said much of the US $257 million would go straight to Zamtel’s workers and into the Zambian economy.

Dr Musokotwane further added that the government would reinvest a portion of its proceeds from the sale in order to recapitalise Zamtel sufficiently.

And transport and communications minister Professor Geoffrey Lungwagwa said the ICT sector would be enhanced with the coming of Lap Green on the local market.

“Lap Green will start work as soon as the business transaction is finalised by the end of June,” he said. “The transformation will follow soon after.”

Professor Lungwagwa said Lap Green would undertake network expansion programmes, infrastructure rehabilitation and increase in coverage among other things.

“The company will also bring with it innovation which is very important to the company,” he said. “With Lap Green’s investment, Zamtel will soon be a key source of competition on the local market.”

And Lap Green executive Abdulbassat Elazzabi said the company was into different sectors of the economy like agriculture, tourism and technology.

“Lap Green Group is worth about US $5 billion and we look forward to transforming Zamtel,” he said.

Labels: CORRUPTION, PRIVATISATION, SITUMBEKO MUSOKOTWANE, ZAMTEL

posted by MrK @ 7:28 PM