Selling off the nation?In the last week of April, the Chiluba Government finally got the privatisation Noun 1. privatisation - changing something from state to private ownership or control
denationalisation, denationalization, privatization
social control - control exerted (actively or passively) by group action show on the road with the announcement that it was offering shares in Chilanga Cement Chilanga Cement is a company of Zambia. Chilanga is principally a cement company, producing cement and cement clinker. The company is headquartered in Chilanga, which is close to Lusaka, the national capital. to the public. Keith Somerville reports on the tortuous tor·tu·ous
Having many turns; winding or twisting.
tortuous adjective Referring to complexly twisted thing. Cf Tortious. path of Zambian privatisation, and the prospects for the sale of Zambia's big one - ZCCM ZCCM Zambia Consolidated Copper Mines
The second and final phase of Chilanga Cement's privatisation is finally under way. The Government wants to sell 27.4% of the company's shares, and to have them listed on the Lusaka Stock Exchange The Lusaka Stock Exchange is the principal stock exchange of Zambia. It is located in Lusaka and it was founded in 1993. Its name is abbreviated to LuSE. The market is a member of the African Stock Exchanges Association. by May 22. This is the first of 20 state companies which will be fully or partially privatised. Others including the mining giant Zambia Consolidated Copper Mines Zambia Consolidated Copper Mines Ltd is the principal operator of copper mines in Zambia. The government of Zambia owns over 85% of the company's stock. The stock is listed on the Lusaka Stock Exchange, the London Stock Exchange and on Euronext in Paris. (ZCCM), Zambia Steel and Building Suppliers, the Mufulira Hotel and National Air Charter of Zambia Ltd.
Once Chilanga's shares appear on the exchange, President Chiluba will be able to answer those critics who have accused the Government of failing to get privatisation off the ground.
Mr Chiluba came to power in October 1991 promising to divest the Government of loss-making or inefficient parastatals. In February 1994 the Stock Exchange was established as part of the promised privatisation campaign, but Chilanga is the first to be listed.
Chilanga had in fact been technically privatised in October 1994. The Government had offered Britain's Commonwealth Development Corporation (CDC See Control Data, century date change and Back Orifice.
CDC - Control Data Corporation ) its stake in Chilanga as early as June 1993 under CDC's pre-emptive rights Pre-Emptive Right
The right of a company's existing common shareholders to have the first chance to purchase shares in a company's future stock issue.
Also known as "pre-emption rights".
See also: Common Stock, No-Par-Value Stock, Stock to shares in the company (CDC already held a 24.5% stake, having set the company up in 1949). But while CDC bought enough of the Government's stock to give it a 50.1% controlling stake - and the responsibility for management - it waived its rights to the rest of the Government stock so that it could be sold to the public.
The way was finally cleared for the final share sale when, on March 31 1995, Finance Minister Ronald Penza announced the winding up of the Zambia Industrial and Mining Corporation (ZIMCO ZIMCO Zambia Mining and Industrial Corporation ), which had overseen the Government's holdings in, or control over, some 150 companies. The dissolution of ZIMCO was the fulfilment of a promise made to Western donors at the donors' meeting in December 1994.
But the acid test of privatisation will be the fate of ZCCM - the copper and cobalt mining monopoly which is at one and the same time the major pillar of the economy and the major drain on economic resources.
ZCCM has been an economic disaster area for years, with accumulated debts of $700m and severe production problems. The Government has been seeking foreign loans or equity to recapitalise the company and foreign partners to take on a major shareholding.
Anglo-American has been top of the list of interested parties but has adopted an extremely cautious approach. It is worried about the level of ZCCM indebtedness and is to carry out an extensive financial and technical study before any decision is made to increase its 27% holding (through Zambia Copper Investments).
Negotiations have been under way between the Chiluba Government and Anglo for some years and Anglo has stated that it is prepared to put together a consortium to take a majority shareholding in ZCCM if its study comes to positive conclusions about ZCCM's production and financial prospects. Mr Jack Holmes, the Director of Anglo's Central African Central African may mean:
There are those within the ruling Movement for Multiparty Democracy The Movement for Multy-party Democracy (MMD) is a political party in Zambia. Originally formed to oust the previous government, MMD controlled an absolute majority in parliament between 1991 and 2001, when its past leader, Frederick Chiluba was president of the country. (MMD MMD Movement for Multiparty Democracy (Zambia)
MMD Make My Day
MMD Merchant Mariner Document
MMD Myotonic Muscular Dystrophy
MMD Myotonic Dystrophy
MMD Mass Median Diameter
MMD Metal Matrix Diaphragm ) who would like to see a greater and more definite commitment from Anglo to participate. They see Konkola Deep and Konkola North as very bright prospects whose potential should be recognised and exploited as soon as possible. Mr Enoch Kavindele, the newly-elected MMD MP for Chingola (in the Copperbelt), said he was impatient to see an influx of new capital into ZCCM to get it over its chronic lack of investment and its continuing technical/production problems. However, he told African Business that he thought real movement on foreign investment and a potential Anglo shareholding would have to await the technical and financial study and an audit being carried out at the insistence of the World Bank This could take two years to complete.
While many Zambians are impatient to see progress with ZCCM's privatisation, others feel that an early input of loan capital would help. However, this is looking increasingly unlikely. The Zambian Government asked Nikko of Japan to put together a loan package for the development of Konkola Deep. This has so far proved unsuccessful. Anglo for one was strongly opposed to using loans to prop up or develop ZCCM, given the high level of indebtedness. Mr Jack Holmes' view was that further loans would be "neither possible nor prudent" in the present circumstances and that the company balance sheet couldn't sustain further commitments. He is strongly in favour of waiting for the results of the studies and then following the equity investment approach. Asked if he felt this had led to awkwardness in the negotiations between Anglo and the Government, he replied that the two had a good relationship and that in broad terms Anglo supported the Chiluba privatisation programme.
Zambian Government Ministers have been making strenuous efforts recently to reassure potential investors, particularly in South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. , that investments in privatised Zambian companies This is an incomplete list of Zambian companies.
It may never be fully completed or, depending on its its nature, it may be that it can never be completed. However, new and revised entries in the list are always welcome. would be secure.
Mines and Mineral Development Minister Mr Paul Kapina was in Johannesburg in late March to promise potential investors that legislation would be introduced in the near future guaranteeing private sector mining rights, investments and the repatriation Repatriation
The process of converting a foreign currency into the currency of one's own country.
If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. of profits. He also warned against too much haste or impatience over ZCCM, telling South African businessmen that "when you talk about privatising ZCCM, you're talking about privatising Zambia".