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Govt retains 40pc stake in Zain, gets $11m Friday, 02 July 2010 09:38
By Alvar Mwakyusa, Dodoma
THE CITIZEN
Tanzania will receive $11.2 million (about Sh15.4 billion) and also retain its 40 per cent stake in Zain Tanzania, following the sale of the company to Bharti Airtel of India, Parliament was told on Wednesday.
The minister for Higher Education, Science and Technology, Prof Peter Msolla, told the National Assembly that the government was still in discussions with the company regarding the sale.
The minister explained that Tanzania was the only one, amongst the 15 African countries where the mobile phone company operates, to be given a stake in the communications giant.
We met with the companys officials on June 21 to discuss the sale We have told them to finalise the evaluation of the assets so that we can determine whether the payment made to us is satisfactory, the minister said during debate of the ministrys budget for the 2010/11 financial year.
He added: Since the government has shares in the company, its imperative that it be involved in transactions regarding the sale. The shares we hold in the company are assets that ensure our role is not underestimated.
The minister said the government was still investigating the reasons behind the decision to change the companys name from Celtel to Zain Tanzania.
They told us that the change was just a brand switch made for business purposes. But we ought to find out what was behind the deal, the minister remarked.
Until last week, the takeover of Zain Tanzania by Bharti Airtel had not been finalised, despite the Indian companys announcement that it had paid $10.7 billion for the acquisition of Zain Group in Africa.
Two Cabinet ministers confirmed to our sister paper, the Sunday Citizen, that the deal had not yet been finalised, as there were issues that still needed to be sorted out.
Prof Msolla said then that Zain and Bharti Airtel could not have sealed the deal without involving the government, which has 40 per cent shares. He said the two companies could not claim to have completed the multi-billion dollar deal, when talks were still going on.
A big mistake has been made. Being a shareholder, the governments involvement in the companys transactions is a must As far as I am concerned, we are not done yet. They cannot say they have sealed a deal when we are still carrying on with talks, Prof Msolla said then.
Finance minister Mustafa Mkulo told the Sunday Citizen that as of last week, the negotiations between Zain and the government were still continuing. However, he would not reveal issues that were pending.
This matter has not been finalised. We are still in touch with them (Zain) and have not concluded any issues. Lets just leave it there for now, Mr Mkulo said, when told that Bharti Airtel had announced the conclusion of the transaction.
Prof Msolla also told Parliament that the problems afflicting the ailing Tanzania Telecommunication Company (TTCL) would be cleared before August.
We are aware that TTCL has passed through many hands, which is not a positive thing, but the problems will be sorted before August, he said.
The Opposition camp in Parliament had earlier taken the government to task over the sale of Zain to Indias Bharti Airtel.
The Opposition spokesperson on Science, Technology and Communication, Mr Said Amour Arfi (Mpanda Central Chadema), had asked whether the government was involved in the negotiations for the Zain takeover. The Mpanda MP had also wanted to know how the country would benefit if the sale went through.
There are reports that Zain Africa, including the Tanzanian branch, has been sold to an investor from India. Since the government is a partner in the company, does it have anything to say about the sale and how the country will benefit from the transaction? Mr Arfi asked.
And since we have on several occasions asked that contracts regarding partnerships and the sale of government stakes be reviewed by the Opposition, we want to know whether there is a section in the contract which gives rights to minority shareholders to either consent to or refuse some issues that concern the running of the company, he enquired.
He also wanted to know why the government did not float the companys shares on the Dar es Salaam Stock Exchange (DSE) to enable local investors to buy them, after Parliament had passed a law requiring mobile phone companies to list on the DSE.
The MP further charged that the Opposition was unhappy about the initial change of name from Celtel Tanzania to Zain Tanzania, despite having been given the explanation that the switch was just a simple act of rebranding.
In their contributions to the ministrys budget estimates, MPs also warned the government to exercise caution during the sale of Zain Tanzania.
By Alvar Mwakyusa, Dodoma
THE CITIZEN
Tanzania will receive $11.2 million (about Sh15.4 billion) and also retain its 40 per cent stake in Zain Tanzania, following the sale of the company to Bharti Airtel of India, Parliament was told on Wednesday.
The minister for Higher Education, Science and Technology, Prof Peter Msolla, told the National Assembly that the government was still in discussions with the company regarding the sale.
The minister explained that Tanzania was the only one, amongst the 15 African countries where the mobile phone company operates, to be given a stake in the communications giant.
We met with the companys officials on June 21 to discuss the sale We have told them to finalise the evaluation of the assets so that we can determine whether the payment made to us is satisfactory, the minister said during debate of the ministrys budget for the 2010/11 financial year.
He added: Since the government has shares in the company, its imperative that it be involved in transactions regarding the sale. The shares we hold in the company are assets that ensure our role is not underestimated.
The minister said the government was still investigating the reasons behind the decision to change the companys name from Celtel to Zain Tanzania.
They told us that the change was just a brand switch made for business purposes. But we ought to find out what was behind the deal, the minister remarked.
Until last week, the takeover of Zain Tanzania by Bharti Airtel had not been finalised, despite the Indian companys announcement that it had paid $10.7 billion for the acquisition of Zain Group in Africa.
Two Cabinet ministers confirmed to our sister paper, the Sunday Citizen, that the deal had not yet been finalised, as there were issues that still needed to be sorted out.
Prof Msolla said then that Zain and Bharti Airtel could not have sealed the deal without involving the government, which has 40 per cent shares. He said the two companies could not claim to have completed the multi-billion dollar deal, when talks were still going on.
A big mistake has been made. Being a shareholder, the governments involvement in the companys transactions is a must As far as I am concerned, we are not done yet. They cannot say they have sealed a deal when we are still carrying on with talks, Prof Msolla said then.
Finance minister Mustafa Mkulo told the Sunday Citizen that as of last week, the negotiations between Zain and the government were still continuing. However, he would not reveal issues that were pending.
This matter has not been finalised. We are still in touch with them (Zain) and have not concluded any issues. Lets just leave it there for now, Mr Mkulo said, when told that Bharti Airtel had announced the conclusion of the transaction.
Prof Msolla also told Parliament that the problems afflicting the ailing Tanzania Telecommunication Company (TTCL) would be cleared before August.
We are aware that TTCL has passed through many hands, which is not a positive thing, but the problems will be sorted before August, he said.
The Opposition camp in Parliament had earlier taken the government to task over the sale of Zain to Indias Bharti Airtel.
The Opposition spokesperson on Science, Technology and Communication, Mr Said Amour Arfi (Mpanda Central Chadema), had asked whether the government was involved in the negotiations for the Zain takeover. The Mpanda MP had also wanted to know how the country would benefit if the sale went through.
There are reports that Zain Africa, including the Tanzanian branch, has been sold to an investor from India. Since the government is a partner in the company, does it have anything to say about the sale and how the country will benefit from the transaction? Mr Arfi asked.
And since we have on several occasions asked that contracts regarding partnerships and the sale of government stakes be reviewed by the Opposition, we want to know whether there is a section in the contract which gives rights to minority shareholders to either consent to or refuse some issues that concern the running of the company, he enquired.
He also wanted to know why the government did not float the companys shares on the Dar es Salaam Stock Exchange (DSE) to enable local investors to buy them, after Parliament had passed a law requiring mobile phone companies to list on the DSE.
The MP further charged that the Opposition was unhappy about the initial change of name from Celtel Tanzania to Zain Tanzania, despite having been given the explanation that the switch was just a simple act of rebranding.
In their contributions to the ministrys budget estimates, MPs also warned the government to exercise caution during the sale of Zain Tanzania.
