Cash-strapped Zambian state-run telecoms firm Zamtel, which provides a range of services including landline, mobile, FttH and ADSL, is reportedly for sale, though this has been denied by at least one senior government figure.
A report in the Lusaka Times suggests that Zamtel Chief Executive Officer Joshua Malupenga told staff last week that the Zambian government had already found an (unnamed) equity partner to run the company and that job losses were inevitable. The target date for the sale was August, given the urgent need to reduce the burden of managing Zamtel’s losses.
These losses are significant. Science and Technology Minister Felix Mutati has suggested that some US$265 million investment is needed simply to keep the company going, but that it also has a debt in the region of around US$175.4 million, a long-standing $500 million debt owed to Libyan company Lapgreen, and other liabilities. Some 90 percent of Zamtel’s revenue is apparently being used for administrative expenses.
Mutati noted that the government had no intention of recapitalising the company as it is prioritising other areas such as education and health.
However, Mutati himself has also apparently said that no partner has yet been identified because a working group, which will look at Zamtel issues and make a proposal on the way forward, has not yet met.
If an equity partner is not announced soon, however, given the enormous debts the company has incurred, not to mention the infusion of investment it urgently needs, getting rid of it quickly may be difficult.