Maravi

Govt finally hands over Zamtel assets

COMMENT - The Zambian Treasury gets $42.6 million for ZAMTEL.

Govt finally hands over Zamtel assets
By Ernest Chanda
Sun 11 July 2010, 04:10 CAT

LYBIAN African Business Portfolio (Lap Green) has not come out clearly on the status of all Zamtel employees, now that the firm has officially acquired 75 per cent shares in Zambia’s communications company.

And finance minister Dr Situmbeko Musokotwane has disclosed that the guarantee that government had given to take care of Zamtel suppliers and other creditors had been shifted to Lap Green.

Responding to questions from journalists after the official share-handover ceremony at the ministry of finance in Lusaka yesterday, Lap Green representative Abdulbaset Elazzabi could not categorically state how many employees his firm would retain and how many would be laid off.

Elazzabi however promised massive investment in the company as part of the expansion programme.

“This signing ceremony is the beginning of great work to roll out a good telecommunication network in Zambia. We have to invest in this company. It’s a major investment; we have to invest in IT information Technology, mobile communication and many others. And we shall interview all the staff as a process. We shall have to interview them one by one in order to assess their capabilities. And anyone who makes it after the interviews they will have to stay,” said Elazzabi.

And finance minister Dr Situmbeko Musokotwane has disclosed that government would no longer be responsible for settling Zamtel debts with its creditors since that would be catered for by the new owners of the company.

“We are all aware that LAP Green will pay $257 million for the 75 per cent shares they now hold in Zamtel. And this money will be broken down as follows: $117.7 million will go towards employee benefits and liabilities; $64 million will be injected into the company; $32.7 million will be used to settle external Zamtel liabilities, while $42.6 million will come to the treasury. I must also mention that because of this development the $75 million guarantee government had given suppliers has now shifted to Lap Green. And indeed this is a relief to the treasury.”

Dr Musokotwane said the minister of commerce will issue a ministerial statement in parliament, giving a full account of the Zamtel privatisation process.
At the same ceremony, Elazzabi signed a Master Payment Plan Instruction, allowing Lap Green bankers to transfer money into GRZ account for the 75 per cent Zamtel shares acquired.

And acting Commerce minister Dr Brian Chituwo also signed an Investment Promotion and Protection Agreement on behalf of the government.

On June 5 this year, government announced the sale of Zamtel’s 75 per cent shares to 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 the company’s assets.

Announcing the privatisation of Zamtel at the Ministry of Finance offices, 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.”

Labels: ABDULBASET ELAZZABI, BRIAN CHITUWO, CORRUPTION, LAP GREEN, SITUMBEKO MUSOKOTWANE, ZAMTEL

posted by MrK @ 4:11 AM