ZIMBABWE'S SNO IS SHORT OF FUNDS AND CANNOT ROLL-OUT

Mergers, Acquisitions and Financial Results

Teleaccess (Zimbabwe) (Pvt) Ltd, controversially licensed by cabinet last year as the second national fixed telephone operator, is unable to roll out its project due to lack of funds. Official sources said TeleAccess, headed by Zanu PF Masvingo provincial chair Daniel Shumba, is in dire straits.

They said TeleAccess has now dug into a Jewel Bank overdraft facility to the tune of ZD149 billion. The outlay is said to have been used largely as working capital rather than capital expenditure. Sources said the Jewel Bank, which is becoming increasingly exposed to the overdraft, has now either frozen the facility or is about to do so to cut its losses.

Jewel Bank advanced money to TeleAccess when Reserve Bank governor Gideon Gono was still its chief executive, believing that TeleAccess would start operations and repay the loan. The bank is now said to be thinking of converting debt into equity if it can't recover its money.

Jewel Bank chief executive Nyasha Makuvise recently refused to comment, citing "client-bank confidentiality".

However, Shumba has denied any financial problems, saying he owned a lot of assets. He said whatever the amount of overdraft, it was negligible compared to the project's total value and his asset base.

Shumba said his licence alone was worth US$100 million, although banking sources described it as "a piece of political paper that is not transferable".

Sources said Shumba had been struggling in vain to raise money from abroad to finance his project. He recently shifted offices at the up-market Sandton business centre in Johannesburg after a row with his landlords over rentals. In Harare TeleAccess is moving offices to BB House from the expensive Kopje Plaza.

Zimbabwe Independent