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Monday, August 8, 2022

Zamtel up for sale, foreign equity partner found

Economy Zamtel up for sale, foreign equity partner found

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.

32 COMMENTS

  1. Privatisation round 2 is here. Mutati knows something we don’t..why is he campaigning to replace hh. We also have that ndambo in choma campaigning. Is hh sick?

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    • The mental block that you and a lot of others have is that all privatization is bad. What is the benefit of running Zamtel as a government? Zamtel has bad debts written off from landline days and a lot of money has been spent on having it run. If you do not pay taxes, it is easy to understand why you would think using taxpayer money to fund an operation that is loss making is okay. If Zambia should recover as much as $300m from this sale, they should be commended. Do not be deluded, Zamtel has never been off the market. All capitalization has been with a view to sell.

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  2. This makes financial sense. There is no social benefit that Zamtel gives the Zambian people especially after ZICTA was formed. Zamtel is a company and the Government should obtain a good return for its majority stake. The disposal of Zamtel could fetch up to $350m (net debt) which is significant to the treasury.

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  3. We can not run a company in a profitable sector what more mining? Pay Foward destroyed this company and appointing a Technican as CEO didn’t help matters

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  4. And remember PF cadres that leasing Zamtel to an equity partner does not mean selling it. What Edith Nawakwi & Chiluba did to the mines is selling but this is not selling. They are simply leasing to an equity partner who will assume ownership for a specified period of time,in which, therafter the company will fall back into GRZ hands again. So, yes! great move ba Mutati – absolutely go for it. I wish we had more Ndambos in this country so could buy companies from white people-he is busy buying Choma milling already and the Airport story so i dont he will ve enough change to invest here aswell. If not him then its HH and who else? But HH is now locked cos he is president so he has to watch his investment moves.

  5. Zamtel was ransacked by Edgar China Lungu, who stole all the money coming in and didn’t spend money on infrastructure. Isn’t it, Stup!d KZ? And now it’s too late. Strange, this is a profitable business, they should be making millions, look at MTN. They just should have stayed with Lapgreen, then they wouldn’t have this issue.

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    • I think we have to be objective when analyzing these things. Zamtel was not ransacked by anyone, Zamtel’s problems arose from the fact that its debt collection was not effective with many fellow state owned entities failing to pay their debt to the Company. Because of this liquidity problem, the Company could not innovate faster than the likes of Airtel and MTN and the liquidity issue became a solvency issue. Government has recapitalized the business but it’s not easy to catch up in a business where your competitors are large multinationals. Disposal is a good solution, the only issue is how much will be realized from this sale?

  6. Seriously we need more of the James Ndambos-just watch at how he will transform that block of Choma-Kalomo-Livingstone,it will become like his own province in future hence he needs strong positive competition -thats how Zambia will grow. Cos if one man like that dies then we back to square one again. As the rest are just mwankoles who jump from one political party to another with no proven track record. They only become rich when there party is power.After that they become literary nothing-nobodies. We such big private Black Zambian business people in each province pls. Hope Enoch Kavindele can resurface in NW province, I dont know abt who is genuinely self made in other provinces as most were literary only political cadres.

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  7. Ndambo has upnd membership card. He will be expelled from party soon. How he dare outshine the self proclaimed richest black Zambian hh right in his own bedroom.

  8. Ndamb0 has upnd membership card. He will be expeIIed from party soon. How he dare outshine the self procIaimed richest bIack Zambian hh right in his own bedr0om.

  9. THIS IS PROOF THAT AS ZAMBIANS, DESPITE BEING EDUCATED, WE CAN’T MANAGE INSTITUTIONS PROFITABLY. ONLY FOREIGNERS CAN. SAD INDEED.

  10. RB must be turning in his grave. After all the scorn the man went through over the sale of ZAMTEL, we are back to where we started from – but this time with more liabilities. All this due to imitation of a leadership – just give ZAMTEL back to LapGreen.

  11. Jonathan Mutaware @ 7

    How old are you and where have you been? Zambia has many f*ckin $ Dollar Multi-Millionaires living in Zambia and in Diaspora who can easily invest or bring their hundreds of $ Dollars back to Zambia and buy these companies and restructure them. We know who these people are… 1. # Dr Dambizo Moyo – She is a former Godman Sachs Investment Banker who is married to a white American multi-billionaire…. 2. # Independent Observer – The UK/USA-based Lusakatimes blogger and investment banker who made $50m from bitcoin and now is estimated worth to be $250 Million after he sold his shares in Apple having bought them for peanuts a share decades ago and sold them for $655 a share in 2013…. 3. # Charles Chanda – who just offered to pay off Zambia’s Euro Bond Debt about a…

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  12. Each time I hear of ZAMTEL issues it reminds me how naive SATA was. We have to resolve this problem twice at 10 times the cost. Like it or not, the man should have never been President in the first place.

  13. For sure there is nothing to be call ours, does it mean we have no competent Zambia to build up what is falling, do you think the foreign guys come with the interest of Zambian at heart?

  14. 3. # Charles Chanda – who offered to pay off Zambia’s Euro Bond Debt about a week Ago…. He is an Emerald Miner who has made hundreds of millions of Dollars from Europe and mainly Switzerland…. 4. # Jasmine FK Banda a low-down unknown Denmark based Zambian. She is a senior partner for a global Private Equity Investment Company. She is worth about $180m Dollars… And many more others who can invest in Zambia. We also have hundreds Asian Zambians who are $ multi-millionaires who have loaned billions of dollars to the government on the local market.

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  15. Chaps like this hater @ JONATHAN MUTAWARE have severe inferiority complex in life. They only see development through the eyes of another person and not themselves. Bro..!! rise up to the challenge and don’t just sit waiting for Enock Kavindele or James Ndambos to develop Zambia. What you JONATHAN MUTAWARE is saying is that you he is d*ll and st*pid to do anything or contribute to Zambia………..

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  16. It’s difficult to make a fair comment in the absence of an evaluation report. At how much has the Mwembeshi Earth Satellite been valued and how much does it contribute to Zamtel’s annual turnover? When hyenas want to eat their offspring they first accuse them of smelling like goats. Mutati has just mentioned the flip side of Zamtel, how about the other side? At the time of sale we were told that mines won’t last longer than 10yrs!

  17. That nincompoop sata created the problem for zamtel when he decided to grab it back from lap green for no reason than to gain popularity. Now he has gone 6 feet under bur left all the problems for those above ground.

  18. Ladies and gentlemen, we can trivialize this issue, but one thing that I am sure of is that this deal to sell ZAMTEL was hatched before UPND came into power as a pledge to pay back the shylocks who financed their campaign. Communication companies all over the world are the quickest way to recoup investment. just watch the space for the buyer. Tatwalande ifingi!!
    Just think through the events leading to this:
    1. Was the sell advertised anywhere in local or foreign newspaper?
    2. Has any evaluation been done for the Assets and Liabilities?
    3. What’s the current share structure of ZAMTEL?
    4. Were Zambian nationals consulted prior to the expression of sell?

    THIS IS PRIVATISATION PART 2 RELOADED!!

  19. I think selling Zamtel is a lazy approach to solving its financial problem

    Zamtel is a strategic national asset that provides universal connectivity solutions to every village. Which private entities will not

    How do we run a country where all communication platforms are owned and managed by foreigners?!?

    Zamtel owns a chunk of spectrum which is over $300k.

    Let’s be serious

  20. In the 1990s privatisation,sale of the Zambia consolidated copper mines,parastatal companies and government infrastructure all over the country so a few individuals emerging rich, industries employing a lot of workers vanish,job losses, the death of bread winners and families.

  21. Uganda has surrendered critical infrustucture to others and effectively their attractiveness is in focus for long-term Investments SECTORIAL

  22. It’s within government structural and policy framework to work out better Transformative Investments for zamtel and infratel that is supportive to egovernance and fintech long-term for social and econmical progress in Zambia It’s able to perform Ike those in Germany and others

  23. You can list viable and competitive utilities on the stock exchanges The considerations could be low for ultilities that have already operational and crippled Balancesheets The equity valuation could be effectively negative so issues of guarantee s and interventions by government including governance could and is still a valid option to move performance as opposed outright sell which could reflect those rbc capital

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