Zimbabwe Seeks to Raise $350 Million by Selling Shares in State-Owned Firms
Zimbabwe’s Finance Minister, Mthuli Ncube said there are plans to raise $350 million from selling shares in five state-owned telecommunications companies and a bank as part of economic reforms being pursued by the government.
According to a U.N. humanitarian agency, Zimbabwe’s economy is experiencing a severe dollar crunch and faces more headwinds from a drought that has wilted crops and left up to 5.3 million people in need of food aid.
Ncube said the government would dispose of shares in its two mobile phone operators NetOne and Telecel Zimbabwe, the country’s sole fixed line telephone company TelOne, postal services Zimpost and state-owned savings bank POSB.
In a statement, the finance minister said “work is already under way to identify transaction advisers. (The) government projects to realise over $350 million from this initial process”. He later told a post-cabinet briefing that NetOne and TelOne would be sold as one entity by September and the government would retain at least 40 percent holding.
Ncube revealed that the Zimbabwean unit of PriceWaterhouseCoopers (PwC) has been chosen as transaction advisers for TelOne and the government also wants the company to advice on NetOne. He said that South African telecoms giants MTN, which has previously expressed interest in NetOne, and Telkom, are some of the companies that would be approached to bid for shares.
The finance minister told reporters that “if these entities are still interested, and we will approach them and let them know by the way, and then they have a much bigger asset to compete for. But there will be other suitors that we will invite”.
TelOne, with over half a million subscribers, is saddled with debts of $380 million and incurred a loss of $11.8 million last year, while NetOne, which has 5 million subscribers, swung to a $10 million profit in 2018.
Ncube had said in October 2018 that selling state firms, known locally as parastatals, was one of the ways to cut government spending. The Harare government has targeted selling some or all shares in 43 of its companies, most of which are loss-making and have relied on state bailouts over the years.