Maravi

(LUSAKATIMES) Bye Bye Lap Green, It Was NOT Nice Meeting You.

Bye Bye Lap Green, It Was NOT Nice Meeting You.
TIME PUBLISHED - Sunday, February 5, 2012, 2:28 pm
By Maurice Makalu

I thought I could share some important information from around Africa about the FORMER owner of Zamtel, in case some of you miss them. And just by the way, I would like to appeal to those who have been scared by some UK legal expert who said Zambia could pay as much as $3 billion in penalties to please chilax. He was just bluffing, probably because he wished he could make some money from Lap Green’s losing battle. You know lawyers and their marketing: threats and intimidation to the opponent!

If there are any who are indeed scared by that expert, it is simply because they have not read the sound legal arguments, facts and exhibits in the Sebastian Zulu report. So their ignorance is causing the fear and it is being exacerbated by politicians of doom and gloom. If not that then they are scared simply because they feel inferior to “UK people.” So it is “UK” that is scaring them.

Here is Lap Green for you….from around Africa.

1. UGANDA – 16 Dec 2011

“Uganda Telecom Ltd (UTL) will receive capital from the Libya Africa Investment Portfolio Green Network (LAP Green Network), which owns 69% of the telco, according to local news source The Observer. LAP Green Network’s new board chairman Wafik Shater said ‘We are currently looking at UTL’s critical funding need for the remainder of this year. After ascertaining the actual funds required, we will inject them into our operations here.’ UTL has suffered indirectly as a result of sanctions imposed on LAP Green Network by the UN during Libya’s civil war, worsening the telco’s already substantial debts.”

Lap Green took over UTL in July 2007. So, by the time of UN sanctions in March 2011, UTL under Lap Green management was ALREADY in WORSENING substantial debts. In March 2011 UTL’s network was disconnected from MTN Uganda over $8.27 million in disputed interconnection fees. Service has resumed but the matter is still in court. In September Airtel Uganda threatened to follow suit, over a further $4.2 million in payments.

So when you hear anybody say Lap Green Uganda is a success story, know they are just lying. Pray for them to show some love for mother Zambia.

2. RWANDA – April 2011

“Rwanda is looking for suitors for national carrier Rwandatel after the government stripped Libya’s LAP Green Networks operating license last month (March 2011). The Rwandan government stripped LAP Green Networks of the license for failing to meet key performance targets in terms of investment, network roll-out, coverage and quality of service. Although Rwandatel acquired its operating license in 2007, it only started mobile operations in December 2008.”

UN Sanctions were imposed on Libya on March 29,2011, so they were not the cause for Lap Green’s failure to pay. As at January 2012, a Rwandan court ordered that Rwandatel be liquidated. Lap Green is joining the line of chancers to take over Rwandatel.

3. NIGER – June 2011:

“Niger’s government has canceled an agreement for LAP Green Network of Libya to buy 51 percent of state-owned telecommunications companies Sonitel and Sahel Com, said Salifou Labo Bouche, communications minister. We are currently looking for another buyer,” the minister said on national television yesterday. The decision comes after the government “waited in vain” for a payment from the Libyan company, he said.”

The agreement was signed in Jan 2011, so for 6 months, Lap Green couldn’t pay. We can’t even use the excuse of a civil war because in Jan 2011, Libya was peacefully under Gadhaffi. Only Tunisia was in flames.

4. ZAMBIA – January 2012

So if Lap Green is such a calamity in other countries, how did it manage to succeed so quickly in Zambia? Several reasons:

(a) Zamtel had the best infrastructure amongst all of Lap Green’s acquisitions in Africa.

This is really the main reason. This is shown by the fact that when ZDA announced the privatisation of Zamtel in mid 2010, it said Lap green would invest $127 million over three years following privatisation. Mr. Hans Poulsen, then CEO, was quoted as saying, “The investment will mainly go into restructuring the company; acquiring new technology, building a 3G network, extending network coverage and at the same time re-launch the brand.”

However, in January 2012, newly appointed Chairman of LAP Green, Wafik Alshater, said, “Zamtel is now a Zambian success story. Since LAP Green’s acquisition, the telecommunications company has attracted over 400,000 new customers and grown its market share from 3% to 11%. Lap Green has committed itself to investing US$129 million (ZK670 billion) in Zamtel over two years so as to create a truly competitive and world class telecommunications company.”

This means by January 2012, that $129 million investment was yet to be done. So the success from 2010 to date was on already existing Zamtel infrastructure.

(b) This best infrastructure was given to them on a silver platter.

In addition to receiving the gift of $64.25 million (money for 25% shares) from government to fund its first year operations, government settled its telephone bills which at acquisition amounted to $7 million and at the time of the Zulu report, only $100,000 was outstanding. So in just over a year, government gave Lap Green $71 million free of charge. On top of that, it cancelled tax liabilities amounting to $100 million. Furthermore, Lap Green did not pay the $257 million in full. Instead $64 million of that was to be paid as equity capital over three years.

So who on earth can fail to succeed when there is free money coming from all over?

(c) Zamtel only needed to retrench, not to “desperately” recapitalise, to become profitable. So whoever would have had the guts to fire its employees would have succeeded.

As at March 2010, Zamtel revenue was K385 billion, its staff costs were K253 billion. This was 65% of revenues compared to industry average of 25%. The loss at the same date was K104.8 billion.

So all somebody needed to do was to fire the excess 40% staff costs. This would have translated into cost savings of K154 billion (40% of revenue). The $71 million that was given to Lap Green could then have been channeled into retrenchment packages. Zamtel would have instantly become profitable, like it did under Lap Green, and the other creditors it had would have been settled, including the cancelled $100 million tax liabilities.

5. ZAMTEL: BEST PRIVATISATION DEAL IN AFRICA???!!!

Given the above, what did those politicians and “experts” mean when they told us to celebrate and be proud, saying, “Zamtel was the best telecoms privatization deal in Africa?”

They meant that out of 10, some got zeros, ones and twos; we were the only one with a three: the best among the worst.

6. LIBYA – 27 January 2012

Libya is undecided on the future of its African investments. Mohammed Abdul Aziz, Libya’s deputy foreign minister, admitted on Thursday that the National Transitional Council (NTC) does not yet know the exact extent of Libyan investments on the continent.

Earlier this month, Mustafa Abdul Jalil, the chairman of the NTC, said: “There may be investments that would be better for the Libyan people for them to be closed”. Abdul Jalil added, however, that Libya would increase its investments in Sudan, particularly in agriculture and property. “Reason and justice require us to direct agricultural investments close to Libya instead of the Far East or Central Asia,” he said.

7. CONCLUSION

Now you know. There is nothing to miss about Lap Green. Let us just calculate their change from whatever they spent, give them back and remain with OUR Zamtel. But also, let us not rush to mass re-employee in the name of “creating jobs.” That would be foolish!

Labels: LAP GREEN, LIBYA, ZAMTEL

posted by MrK @ 1:33 AM