A senior official at state run telecoms firm Zamtel has revealed that government has put the company up for sale.
Acting Zamtel Chief Executive Officer Joshua Malupenga told a special virtual staff meeting last week that government has already found an equity partner to run the company.
Mr. Malupenga did not disclose the name or origin of the equity partner but stated that it was a foreign firm.
The meeting was held two days after Science and Technology Minister Felix Mutati revealed during a tour of Zamtel House that the entity was loss making and that government had no intentions of recapitalising the company.
A source who attended the meeting explained that the meeting was convened to brief workers and explain the implications of Mr. Mutati’s statement.
“The meeting was cordial but tense. The Acting CEO went straight into subject and told us that a decision had already been taken and we have to be ready for the changes that will come with the new equity partner. Job losses are inevitable,” the source said.
The source revealed that according to Mr. Malupenga, government wants the new equity partner to come in before the August first anniversary of its reign.
“The target is August, they want the process quickened because Zamtel is making losses and is now a burden,” the source added.
Mutati recently disclosed that Zamtel is a loss-making venture with about 90 percent of its revenue being utilized for administrative expenses.
Mr Mutati said government will however, not recapitalize Zamtel because it has other priorities it intends to spend its resources such as funding the teacher and health-workers recruitment, Constituency Development Fund and youth empowerment.
Mr Mutati said estimates show that Zamtel currently needs a sum of US$265 million in order to survive as a company by way of investing in its co-networks, infrastructure and other business support services.
Mr Mutati said this is in exception of a staggering debt of around K3 billion and the over $500 million owed to Lapgreen, without taking into account other liabilities.
He said Zamtel as a company has a deficit on working capital of around K1 billion with its balance sheet unable to support programs such as maintenance of current infrastructure, expansion and modernization, a key issue requiring to be addressed urgently.
Mr Mutati said no matter how well-written a letter requesting funding may be, government is unable to finance Zamtel because there is no resource envelope at Ministry of Finance.
He said Zamtel now needs to find an answer to its insolvency beginning with where it will find the $265 million required for survival.
He said the Minister of Finance has his hands tied for him to begin financing Zamtel’s operations as he has to deliver value to the people.
“If it means we need to cut some limbs in order to save the life of Zamtel, so be it because that is where the solution for Zamtel lies. Let’s not take it as an easy conversation” the minister told Zamtel Acting Managing Director Joshua Malupenga.