MALAWI CONCLUDES SALE OF INCUMBENT TELECO, MALAWI TELECOMS

Telecoms

The Malawi government last Thursday announced that it had finally passed ownership of the country`s sole fixed telephone operator to an investment consortium, Telecom Holdings Limited (THL), after a protracted delay of the sale.

The Privatisation Commission (PC) disclosed in a statement that the controversial sale of state-owned Malawi Telecommunications Limited (MTL) had now been finalised following a recent court ruling allowing government to proceed with the sale.

Malawi Supreme Court of Appeal on 13 February annulled an injunction on the sale a lower court imposed a week earlier based on an application by MTL`s former board chair Ken Msonda, who acting as a concerned citizen, asked the court to stop government from proceeding with the sale of the telephone company.

Msonda, among other concerns, claimed that MTL`s sale lacked transparency and that the price at which government was selling the company was far below the firm`s actual value.

Malawi government has sold MTL for about 27.4 million US dollars to THL, which comprises Malawi`s conglomerate, Press Corporation as a major shareholder and Germany`s Detecon International as a technical partner and minority shareholder.

"THL have now effectively become the new majority shareholder in MTL, owning 80 percent of the total shares. The remaining 20 percent will still remain with the government of Malawi and will be disposed of at a later date in a manner that will enhance Malawian participation in the company," stated the Privatisation Commission.

The commission said the phone company was sold at an appropriate price that was within MTL`s valuation range in accordance with an independent valuation opinion conducted by Robert Fleming (Pty) Limited that valued MTL to be between 31 million US dollars to 49 million US dollars.

MTL`s privatisation process, which began 1998, has been a controversial issue especially in the past year when there was increasing public outcry that the company was being sold at a very low price considering claims that about 200 million US dollars had been pumped into the company between 1999 and 2005.

Following mounting public protests against the sale, President Bingu wa Mutharika suspended the sale of the fixed telephone operator in August last year but lifted the suspension in December, 2005.

Government decision to sell MTL has been heavily criticised by Malawi`s rights groups who have accused President Mutharika on assenting to a privatisation drive that was only benefiting foreigners and not poor Malawians.

A total of 65 state-owned entities in Malawi have been privatised since 1996 when the country embarked on the World Bank championed privatisation programme.

Angola Press Agency