Government has said that the sale of Zambia telecommunication company ZAMTEL is the highest ever achieved on the African continent.
Commerce Minister Felix Mutati told Parliament this afternoon that had Zamtel not been sold to Lap green networks of Libya, it was going to go bankrupt in October this year.
Mr. Mutati stated that that the consequences of bankrupt would have been too dear to contemplate.
He also claimed that the major business analyst world over have commended government for the successful sale of the telecommunication company.
He has also called on the Zambian people to mobilize resources to participate in the public listing of ZAMTEL, which has attracted public criticisms.
The commerce minister restated that the sale of ZAMTEL was not only done to bring in a new lease of Life to the Company but also reposition its role on the information technology communication.
The Zambia government sold 75 percent shares of telecommunication firm Zamtel to a Libyan telecommunications network, Lap Green for $257 million.
Lap Green has agreed to pay a total consideration of $257 million for the 75 percent equity in Zamtel whose 100 percent equity stands at $343 million.
[pullquote]He has also called on the Zambian people to mobilize resources to participate in the public listing of ZAMTEL, which has attracted public criticisms.[/pullquote]
In addition to the $257 million, Lap Green will provide $62 million in additional funding to finance part of the company’s network expansion programme and taking over government guarantees, relating to a further $75 million in vendor financing, covering Zamtel’s existing network expansion projects.
And Mr. Mutati has expressed confidence that the Zambian business environment will become more conducive after the liberalization of the international gateway.
QFM
Sorry to rain on the minister’s parade but this makes little sense.Highest ever in Africa without elaborating on in what regard this is so? Further, how do you convince us that having a non-transparent no no tender process has yielded this ‘success’ story goes back to the politics of old. When people invested in Zambia’s development ask questions about process of sale, you do not respond with blowing your own trumpet of deciet. I think you use the opportunity to either distance yourself from the unethical or live to pay for it in due time. Mr. Mutati, you are a disappointment, and so is your government.
BS and PR. Felix back up your claim with data
If you are comparing the price of something to others, use something of the same quality and quantity. What other telecommunication companies are you Mr Minister comparing ZAMTEL to? Give us the valuation reports by RP so we can understand a bit of your nonsense. As #1 said data is needed.
He knows this sale has made us the laughing stock of the world. That is why they feel the need to keep up the rhetoric. Best in Africa is not very re-assuring because there is very little going on south of the Sahara that we should be celebrating. All indicators show that Africa is being ripped off and comparing ourselves with countries that are being ripped off too does not make any sense.
Why not compare with their policies with emerging economies in Asia and South America? Did they sell everything they own to foreigners? Did they consistently give tax breaks to foreign companies whose activities where not leading to any real solid improvements in the lives of their citizens? Did they sing about FDI as if its obvious that every kind of FDI necessary benefits the recipient country?
He knows this sale has made us the laughing stock of the world. That is why they feel the need to keep up the rhetoric. Best in Africa is not very re-assuring because there is very little going on south of the Sahara that we should be celebrating. All indicators show that Africa is being ripped off and comparing ourselves with countries that are being ripped off too does not make any sense.
Why not compare with their policies with emerging economies in Asia and South America? Did they sell everything they own to foreigners? Did they consistently give tax breaks to foreign companies whose activities where not leading to any real solid improvements in the lives of their citizens? Did they sing about FDI as if its obvious that every kind of FDI necessary benefits the recipient country?
Why not compare with their policies with emerging economies ? Did they sell everything they own ? Did they consistently give tax breaks to fo-reign companies whose activities where not leading to any real solid improvements in the lives of their citizens? Did they sing about FDI as if its obvious that every kind of FDI necessary benefits the recipient country?
Mr Minister you comparing to what?
Pathetic! Of course it is the best; the best form of day light robbery by a government claiming to be fighting corruption. The best in showing that in Africa one can rule with no compassion at all. The best display of utter selfishness. Yes, THE VERY DISGUSTING BEST!!!!!!
Mutati is at it again-
In bemba we say ‘Umwana ekalisha ilyo anya’. You thought you were clever but we are waiting on the sidelines for you and you will pay dearly for this! Trust me on this one!
Ghana Telecom was sold in July last year to Vodafone at an approximate value of US$1.3 billion plus a cash injection of $500 million to boost the company’s operation, bringing the total to $1.8 billion. Do these people think we are so s.tupid. More over Ghana Telecom didnt include its fiber backbone
wwwcomputerworld.co.ke/articles/2009/02/17/controversy-surrounds-africa-telecom-privatization
Ghana Telecom was sold in July last year to Vodafone at an approximate value of US$1.3 billion plus a cash injection of $500 million to boost the company’s operation, bringing the total to $1.8 billion.
$1.8 Billion compared to $257 Million
And you thought Mutati was one of the few objective ministers! boy! werent we wrong!
#7 And the values for Ghana Telecom and Zamtel are the same?
#8 Well ask Mutati to release the valuation report since he says Zamtel is the best then we can compare with that of Ghana,otherwise his statement is baseless
# 2 is right why should they compare the selling price for Zamtel with other telecommunication companies in other african countries when there is no straight comparison in terms of the assets involved,year and personnel.It is all crap only fit for my grandmothers dustbin.
#9 You are the one making comparisons between the sale prices of Zamtel and Ghana Telecom and my question in #8 is based on what you have said in #7 – but you want me to go and ask Mutati?
#11 the minister said Zamtel sale is the highest ever in africa and my argument is based on figures, $1.8 billion against $257 Million, he didnt back up his claims with any data,ie, valuation reports.In other words his statement is frivolous.So yes! Ask Mutati how he came up with this conclusion
#11 you are dull. Just another TRIGLODITE like Mutati
so many troglodytes pa zed. when is such useless and baseless rhetoric coming to a conclusion kanshi bane?
This governement made Zamtel to fail coz it never paid zamtel bills at the expense of zamtel going broke and now same government has sold zamtel, what a country webo?
“Ghana Telecom was sold in July last year to Vodafone at an approximate value of US$1.3 billion plus a cash injection of $500 million to boost the company’s operation, bringing the total to $1.8 billion.” Source: ComputerWorld Kenya-17 Feb, 2009
Can the Minister cite his source too. I thought Mutati was one of the people in MMD cabinet with a straight head. Am sorry from now on I will start doubting his big figures and grandiose project dreams. I think He needs to apologise for lying to the nation. This is unacceptable
#21 Mwiponta Mukabwela says:
“This governement made Zamtel to fail coz it never paid zamtel bills at the expense of zamtel going broke and now same government has sold zamtel, what a country webo” MY QUESTION IS IF THEY ARE NOT RESPONSIBLE ENOUGH TO PAY ZAMTEL BILLS, HOW THEY GOING TO MANAGE WITH A PRVATE COMPANY?
“Zamtel was going to close down in October”, mere PR talk to support some selfish motives. The Tanzanian government is fighting hard not to be taken for a ride by the new owners of Zain and in Zambia, the cabinet is pushing for the sale of a prime asset. Just like Zambia Airways under Chiluba, government taking action for wrong reasons without a thought for the future. Am sure the asset values are too high, why should Lap Green put money in something “dying”. In 10 years time, our children will ask the question why did we sale a cash cow company to Lap Green, as I expect it will be one of the most valuable business in Zambia.
All was done because RP shared the fees with all these pathetic corrupt chaps.
#22 Wrong Timing and #18 RED CARD-Smoothcriminal. Stop misleading people with half baked facts and you just presents information that supports your position. That is plain wrong and begin manipulative probably due to low self esteem. Let me break it down for you. What we are talking about here is valuations. You can’t say one company is more expensive than the other until you compare their price to earnings rations. Price a lone is deceptive. One thing you also forgot to notice was that Ghana Telecom had a mobile unit called One Touch that had 1.5 million subscribers and that is what Vodacom really paid for. The fixed line was useless. The ZAMTEL’s mobile cellZ had 150 000 subscribers, that is not a stellar figure compared to ..TBC
from #25 ..compared to competitors like ZAIN that had 3m. Your comparison of Ghana Telecom and ZAMTEL is flawed because it just focuses on the figures. I I earn $10,000 and Spend $20,000 am actually poor than the guy who earns $100 and spends $50. So look at PE before you embarrass yourself. Besides don’t underestimate the signifance of the mobile unit. Recent case here: TELKOM used to trade well about R120 per share and when they stripped out just its 50% value in Vodacom through unbundling, the share price fell down to R34. That is well over 70 % loss in the value of the company. SO if somebody wanted to buy the whole TELKOM today, they would pay 70% less than they would have paid when it had a 50 % stake in vodacom. Conclusion, the Hon Minister Mutati is Right.
Going by this rubbish talk, i think Mutati is just among the prominent thugs we have in the Zambian Cabinet!
zamtel is a huge success thats why the workers are happy. look at zanaco it was on its knees until after govt found a good buyer in rabo bank which injected in capital and customer confidence. zanaco is the best bank in the country going by the balance sheet and products. zambian economy is growing thats why today the biggest supermarket in africa PICK AND PAY has opened its doors in lusaka. investers have trust in govt not infesters as pf says who would chase all foreigners if allowed to rule
#25
Im at pains to understand your reasoning; Zamtel was sold because it was “presumably” making losses, so the issue of earnings ratios is non-existant (whatever that is)
What do you mean when you say price is deceptive,please elaborate,and make sure you explanation relates to the sale of zamtel.
You, Me and probably Mutati dont know the value of Ghana Telecom,but we know the price at which it was sold ($1.8b),You and I dont know the value of Zamtel assets but we know the price ($257M)
So how can the minister say Zamtel was sold for a higher price than Ghana Telecom.I really cant see your argument. As old as you are i expect you to be civil and wise enough not to use demeaning or provocative words.For once show us that you are mature,you claim to have kids at universities
#29 Correction, I don’t have Kids at the University. Those claims by an imposter who hijacted my ID when I went to the US.
Coming to the question at hand, lets agree on some basics. First anybody buying a business do so in order to make money right? And that Money is what we call earnings (E), right? Now for you to get that business you need to pay for it at a Price P, right? Now lets assume there are two business in the same industry. Business A and Business B. Business A earns K100 and Business B earns K50. The price for both Businesses is K1000. Which business would you consider Cheap? A or B, and why? If you can understand and explain this, the rest should be golden. I wait to hear from you?
#30
I dont know where you are getting this pricing issue from.
FACT- You dont know how much Ghana telecom was making (earning-losses/profits) for it to be sold at $1.8billion as compared to $257Million in Zamtel
FACT
Ok what is done is done but atleast now think straight with the $257m. Zambian population is only 10 million plus, so spend atleast $1m on each Zambian Citizen Poverty Alleviation and lets see the results. $1m for my Grandpa in Vumbwe Chadiza can really make a significant difference. Think about GRZ
FACT-you dont know the value of zamtel and also you dont know the valuation of ghana telecoms
So,if we dont know the value of both entities,how can we possibly conclude that ours was a better deal than theirs,lets not dwell on things we dont know,give me facts, not prices that you have no idea about
mind you zamtel was sold because it was making “”LOSSES””, we dont know why Ghana sold its telecoms company.argue with facts not innuendo
Im not going to agree with you on your pricing principle,its very flawed in this instance
MMD Chief Boot Licker says:
June 23, 2010 at 11:58 pmI
am proud to be MMD Chief Boot Licker and my contribution to my country and government. For yall information, I have 3 kids, Two at University in South Africa and 1 at UNZA in Zambia. Im sure my children are more on a good path to success than half of kaponyas here. It is important to have facts before you open your poor and uneducated mouth! With or without MMD I will remain The Chief Boot Licker! My salary alone has served 19 street kids from Lusaka! Yes there is a reason people call me MMD Chief Boot Licker!
Iwe MMD Chief Booklicker, I can assure you that all Telecom companies in Zambia, be it a mobile or whatever, pay something to ZamTel as they all all the core infrastructure!!! LAP Green will easily recover their monies in less than 5years!! There was no reason to sell ZamTel at such a give away price!!
Iwe run away from zed I failed; “today the biggest supermarket in africa PICK AND PAY has opened its doors in lusaka”! I am sure these chaps are so amazed that the only other competitors are foreigne companies. As soon as you monies dry out, these so called investors will move elsewhere, thats how things work! Zambia is forever becoming a “tree without roots”! I Fear for the outcome, and looking rather like a major task for the next govt to put thinks right. MMD, thanks for ruining…
#33 looks like we can’t have a decent debate in company evaluations. You are just obsessed with the $1.8 billion , you don’t even know the earnings positive or negative of Ghana Telecom, I wanted to give u free education in investigating but alas you seem not interested and just obsessed with $1.8 billion. In my example above I could change those earning numbers to loses (-K100 and -K50) and the analysis model will still be the valid and you can’t claim that companies A and B are worth the same just because you bought them at the same price. That is the mistake you are making my friend. See this for what it is. It is that simple. Step back and look again. Pure common sense. The Price P is not the only thing you can look at. Value and Price are not the same
#34 Check the flag on that Entry and you will notice it was USA and I spell Bootlicker as one word and not two words as in Boot Licker . Even my Assistant also spells it as one world. Don’t fall for that Impersonator. Am in South Africa my dear
#36 Quote’ you don’t even know the earnings positive or negative of Ghana Telecom”” end quote
You dont know the earnings of Ghana telecoms either,and you dont know the earnings or losses of Zamtel as well, all “we” (you and I) know is that Zamtel was sold because it was making “losses” and couldnt sustain itself
My humble question is; how did Mutati come to the conclusion that zamtel was a better deal in the whole of africa,,,just answer this simple question
#38 He came to that conclusion based on the Evaluation model from model RP Capital Partners Limited used in the evaluations. They showed a telecom sector evaluation for Africa. I hope that answers your question. Happy Now???
Are you down under, it must be late there, right now!!!. Anyway nice talking to you. I need to go now ..my blogging time is up and am sure we shall meet on another thread. Enjoy your day and have a super one.
I used to hold Mutati in high esteem but now coz he is behaving like Bootlicker, i don’t feel the same anymore. Zamtel sale is a blunder of the highest order. How much for starters does Govt owe Zamtel through its many departments due to non payment of bills? Govt’s indebtedness has contributed to cashflow problems! This transaction will backfire in the near future
Just to help sort out matters between smoothcrimininal and MMD Chief Bootlicker, considerations such as in Zamtel are based on fair value of assets less cost to sale. Earnings per share are mainly left to equity owners to gauge how much their investment has paid them in dividends. In the case of Zamtel and according to Mutati losses were massive and the issue of Earnings per share should not arise. In short Zamtel had massive accumulated losses that raised solvency and liquidity issues. Mutati himself predicted liquidation in a near future.
They would just have had to re financed it really than to lose 75%, why should the national telecommunication be almost completly be controled by a mere corperation? A government should be able to control all its telecommunications affair. Despite the lease of Zamtel, where is the $257 million? Who benefited in this bargain? Consequently, how can just one person single source the haggler? Moreover, the united nations put sunctions to freeze all assets of the company’s origin, so here is the question of where is the money of frozen assets? If so, explain to the nation please, what are you waiting for to conclude fairly this issue!