MERGERS, ACQUISITIONS AND FINANCIAL RESULTS

Zambian president looks into Zamtel sale to Libya Controversy surrounds sale of stake to Libyan company LAP Green

Zambia's new president, Michael Sata, has formed a committee to investigate the controversial sale of the Zambia Telecommunications Company (Zamtel) to Libya's LAP Green Networks.

The previous Zambia government sold Zamtel for $395 million, claiming the deal was done to save the company from closing after a plan to recapitalize it failed.

However, Sata, who was elected president almost two weeks ago, has said the sale of the company was marred by corruption. The sale of the company led to the resignation of the former minister of Communications and Transport Dora Siliya following sustained criticism from the public and stakeholders. The report on the sale of the company by the committee is expected in the next 30 days.

During his campaign, Sata promised he would reverse the sale of the company because its sale was marred by corruption as government officials sold it to benefit themselves. Sata said the 75 percent majority stake sold to LAP Green Networks should have been sold to Zambians in order to empower them and give them full ownership of the once public-owned company.

"I want the report within 30 days because Zamtel is a public company owned by Zambians and we cannot let the company go just like that. Zambians must know how the company was sold," Sata said at the State House in Lusaka last week.

The previous regime claims the sale of the company was done in a professional and transparent manner and within the guidelines of the Zambia Development Agency (ZDA), the country's privatization agency.

Zamtel Managing Director Hans Paulsen said the Zambian government's decision to investigate the privatization process of the company was welcome and that LAP Green Networks was willing to cooperate in the whole process.

Paulsen said the investigation is focusing on the privatization of the 75 percent shares of the telecom company to LAP Green Networks, "but as new shareholders, we had nothing to do with the privatization process."

Paulsen added, "We will cooperate and will be happy to communicate." The Zambian government still owns a 25 percent stake in the company, which the previous government said it planned to sell to the public.

Since the takeover however, Zamtel has improved its services as the new owners have brought in new technologies, including a new-generation network allowing the company to compete with regional operators MTN and Bharti Airtel.

In April this year, the Zambian government froze LAP Green's stake in Zamtel in order to enforce U.N.-backed sanctions following the unrest that engulfed Libya and ousted Libyan President Moammar Gadhafi from power. Since then, the Zambian government has been financing the operations of Zamtel until sanctions are lifted by the U.N.

LAP Green has operations in six African countries including Niger, Uganda and Ivory Coast. LAP Green is a subsidiary of the Libyan Investment Portfolio, an investment arm of the previous Libyan regime.

Source: pcadvisor

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