MERGERS, ACQUISITIONS AND FINANCIAL RESULTS
TTCL Seeks Sh195 Billion State Bailout in Tanzania
Members of the Parliamentary Committee on Infrastructure have asked the Government to bail out cash strapped Tanzania Telecommunication Company Limited (TTCL) and save it from collapse. TTCL is rather like a slow moving car crash that never seems to a conclusion as the Government lacks the will to privatise and have done with it.
Committee member, Prof Philemon Sarungi told reporters in Dar es Salaam that TTCL, which is owned jointly by the Government and Zain Tanzania Limited, needs fresh injection of dollars 150 million (Sh 195 billion), almost double its own liability portfolio of $80 million (Sh104 Billion). The State controls 65 per cent shares with the rest held by Zain. However, the partners have had a troubled investment relationship and Zain is reportedly in a process of pulling its stake out of the company.
An undisclosed Chinese bank is said to be ready to give TTCL the money but wants the Government to guarantee the loan. However, the Government wants to be furnished with the loan details first, something that TTCL has apparently not done.
"As a ministry we advised them to consult with (the) banks they want to secure the loan first and then bring to us the analysis.
(After that) we will forward the proposals to the ministry of finance and economic affairs,"said the deputy minister for Communication, Science and Technology Dr Maua Daftari.
Prof Sarungi also appealed to the Government to pay the debts it owed TTCL, which amount to Sh9.2 billion, preferably before fiscal 2010/11 in order to strengthen the company's capital base. Otherwise, Prof Sarungi sounded like TTCL was in dire financial straits.
"TTCL needs this money (the loan) as starting capital. If they are given that amount, they will be able to run their company profitably and be able to pay the Sh104 billion debt," said Prof Sarungi. He added: "From now on, all TTCL customers including the Government should not be allowed to accumulate their debts; they should pay first before using the service."
On the other hand, Prof Sarungi proposed on behalf of the committee that the 35 per cent stake held by Zain should be sold to Tanzanians and TTCL workers instead of the Government resolving to look for another investor.
During the January session of parliament, the minister for Communication, Science and Technology Prof Peter Msola and other stakeholders will meet in Dodoma to discuss problems within TTCL and chart the way forward for the company.