RP Capital Advisors Limited acted as the lead transaction adviser to the Government of the Republic of Zambia (“Government”) in the partial privatisation of Zambia Telecommunication Company Limited (“ZAMTEL”).
We noted that a Commission of Inquiry (“Commission”) was recently established to investigate this transaction.
However, before the Commission’s findings are officially released,we wish to express our grave concerns about misleading statements regarding the transaction which have appeared in the press, some of which are attributed to members of the Government. These provide a distorted account of our involvement in the process and the results thereof and suggest, entirely without any factual basis, a failure by us to discharge our obligations. In sum, we would like to set the record straight with regard to the quality and integrity of the services we have provided to the Government and the people of the Republic of Zambia.
We deeply regret that, despite our offer to do so, we have not been given an opportunity to make our representations to the Commission of Inquiry. We were unable to address the allegations made against us.
Thus, it appears that the Commission’s process and findings have been conducted with wholesale disregard for due process, fairness and natural justice.
RP Capital Advisors Limited has sent a letter to the Honourable Minister of Justice of the Republic of Zambia expressing our concerns in more detail.
RP Capital Advisors Limited provided services in connection with the privatisation of ZAMTEL pursuant to the terms and conditions of a legally binding agreement with the Government. This agreement was signed following a procurement process conducted by the Zambia Public Procurement Agency.
The process of ZAMTEL privatization was designed to be open,competitive and transparent to afford the Government to select the best and highest bid.
More than 30 parties showed initial interest in the privatization process and raised inquiries on ZAMTEL, 8 of which also made initial submission and prequalified in the process. After a lengthy period of due diligence of ZAMTEL by the prequalified bidders, 4 non-binding and subsequently 3 binding bids were received. The 2 highest and best bidders in the consideration of the Government were invited to the final round of negotiations. The aggregate consideration paid by the selected best bidder, LAP Green, amounted to total of USD 257mn.
(1) USD 97.7 million to be paid on behalf of the Government to employees of ZAMTEL to settle redundancy liabilities;
(2) USD 20 million to be paid on behalf of the Government to settle historic pension liabilities;
(3) USD 42.6 million to be paid to the Government;
(4) USD 32.7 million to be paid on behalf of the Government to settle historic Zambian state supported Chinese bank loans; and
(5) USD 64 million into ZAMTEL to re-capitalize the company.
In addition the winning bidder has assumed more than USD 70 million worth of guarantees previously provided by the Government to ZAMTEL’s suppliers, eliminating any further need for financial assistance by the Republic of Zambia to ZAMTEL. To the extent of our knowledge, at closing of the privatization process in July 2010, all these payments were duly made by this bidder.
The foregoing sets out the entire immediate monetary benefit to the Republic of Zambia at the time of partial privatization of ZAMTEL.
Further, this process had subsequent positive impact on the telecommunication sector in the country and resulted in the decrease in prices for telecommunication services for the benefit of the people and businesses in the Republic of Zambia.
In summary, a company on the verge of bankruptcy with declining customer base and number of subscribers (a distant 3rd place in terms of number of subscribers for mobile services in a market of 3 participants) and negative book equity value was sold to a telecommunication operator with significant means. Thus, creating value for the Government and the people of the Republic of Zambia.
What is more, the result of privatization still leaves the Republic of Zambia with a blocking minority stake in the re-capitalized company and right to IPO the Company on the Lusaka Stock Exchange. In addition, the Government stands to gain an additional payment from the investor based on the financial performance of the company in the future.
The price achieved for a controlling stake in the company was one of the very best among privatizations of telecommunication assets on the African continent.
Thus, the results of the privatization were exceptional given the state of ZAMTEL. This would not have been possible without high level of commitment of all stakeholders involved namely the Government ministries; ZDA; and ZAMTEL management and trade union leaders in the process of restructuring the company leading into the partial sale of ZAMTEL.
We regret having to make a statement in this manner, in particular because the information furnished in this statement is readily available from public sources. The circumstances however, leave us with no other choice in order to protect our integrity.
ABOUT RP CAPITAL ADVISORS LIMITED
RP Capital Advisors Limited is an independent financial advisory firm focused on providing advice to public bodies, private clients and corporations in emerging markets. We combine substantial industry experience, financial expertise, and local market insight. Our advisory team is comprised of a group of people with a wide range of industry and financial experience from diverse backgrounds.
Mr Zulu should resign from govt, how can you afford NOT to interview the main suspects in this so called corrupt sale.
Was the enquiry so lazy or they had to conclude within the 30 days without finnishing their work?
we all know that zamtel sale is fraud ridden. there is nothing knew in this statement.
dora has been found wanting in this all issue. no matter what manouvers she, kunda and rupiah try, it will not suffice. the law languange in this statement is kundaish, dont you think so?
I think they are hiding something, this outfit was brought into the scheme by Bwezani. How could they value assets in Zambia when they were not registered with the relevant Surveyor boards in the country? Malila said their contract was a nullity, Dora was clueless about the meaning of the word and RP Capital still went on to sale our assets to Moamor Ghadafy for a song! We want out asset and grudas back, now!
So the evaluation was for USD$42.6 million. Re capitalise the company in the selling price? Whose money is this – Lap green paying our money for them to recapitalise Zamtel? Is this a defence for RP capital or for LAP green? What was the evaluation price? That was the work of RP capital as per say. Zamtel assets value are lower than redundance liabilities?
two things: it was wrong to sell Zamtel in the first place, secondly ,the buying company should hv taken over the liliabilities. Recapitalizing funds should hv been sourced different from the sale amount. the cloudness of the deal gave room for stealing and corruption. Deal must be reversed period.
RP *****s we are not dull, only time had to tell
In the first place RP capital are wrong guys to talk at this time because they were wrongly sourced as most of us know. Secondly, it doesn’t make any sense at all for the past govt to re-envest $334m into Zamtel and then sell it at $257m even without considering the book value of the company. Nonsense.
You can explain all you want but we zambians know that the deal stinks and must be reversed at all costs. You were warned that your fu$kin fingers will be burnt over this one but you just went ahead. It is a nullity.
This RB capital should shut the fuXXk up and wait for there turn not hurrying to the press for side of the story. This is the most pathetic deal Zambia has ever seen. I just wished these people tried and sentenced to death for sabotage and robbing Zambia of the monies. These people don’t deserve second chance at all.
Like the cu nt called @soft bum bum says explain as much as you want
No one will hear because we are hell bent on fcking witch hunting and geastapo justice we will not listen. We are poor ignorant and have hatered in our hearts. We are lazy fckers who think that we must get hand outs. You see we are all beggars with a known odacity.
So I advise you to teach us a lesson by going to the WTO and international courts of law because in Zambia we are PF.
@@The heading, “ZAMTEL: Statement from RP Capital Advisors ??” Excuse me, were RP INVITED ONTO THIS PAGE??? Wy did you just do the most honourable thing? Present your own version of the story since you knew the agenda already. The commission was not a court but a PUBLIC FORUM and their terms of reference were known by all?
The guilty are afraid why rush to the press and give us the information we already know.RP Capital is a corrupt company look at the truck record of the Company http://www.jpost.com/LandedPages/PrintArticle.aspx?id=236830
Dora Siliya and the Liatos of Zambia have given the Zambians a middle figure saying the ordinary people are dumb and stupid that time is over.Mr.Sata was hired by the Zambians to manage on behalf of the people and to clean the house,If he fails just like the others did in the past he will be fired too.
I would have thought RP would present at least something like a valuation report of zamtel just to show how much it was worth and how they went about valuing it,in their statement
RP Capital can you tell us how much the net assets as per comprehensive statement of financial position (balance sheet) was?
Imwe bantu, did anybody need to be invited to make a presentation to the commission, it was open sittings and any interested person was free to make submissions – atase! this is rubbish!
they had a chance to submit they chose not to. we are not dull people, maybe that’s what Felix Mutati told them.
Can RP Capital tell us how they got the contract to act as chief advisors to GZR?
we zambian are dull .Kaunda mismanaged this economy even by creating ZIMCO.Chiluba sold companies in 1997 cheaply .Were these pipo taken to court? RP capital Capitak
can the learnt collegues explain to me why the gvt did not pump in the said $334 mil into zamtel without selling it,all what i think is they would have changed management or put zamtel on to be controlled by private management advisors.i dont get it how the govt paid $334 m to retain 25% shares when the said zamtel was a public company managed by the zambian govt ,its like buying your own house after selling and then buying it for cheap.i am failing to understand the logic here.can somebody explain please.
This is the money which was used to buy campaign materials by MMD. Plus the 2.1 Billion “cash crops” found at Liato’s farm and more yet to be unearthed.
tried to value ZAMTEL.we all know the assets of ZAMTEL.what is there in kaputa or shangombo nothing.Even in Lusaka or Ndola only outdate telephone lines.
@20 We re able to use those same outdate telephone lines and someone is making profit out of the same
Ni sekasi pa zed. Imwe ba RP, we only want to hear one side of the story, we don’t care if you get a second helping to Zambia’s wealth in the form of a hefty libel suit.
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All of you are very dull…..I agree with Mutati most of commenting here cant understand company valuations!! Dont use emotion…use brains and logic. Zamtel was dead period…..its not just pretige to keep zamtel. MMD did well to sell. everything was pathetic about it service, infrastrure, salaries delays, pension delays…etc Why should you keep it? If satana reverses zmtel…then you shud reverse zanaco which satana was busy protesting in 2007!! We are ruled by patriotic fools now!! Am proud that it was sold even me I would have done the same period!!!
Link from ‘The Nation’ at 12 confirms that RP is not a reputable company. Did they go through a tender process before being appoint to value Zamtel?? How much were they paid for these services??
As previously noted the commission was open and everyone (RP included) was free to make a submission.
ZAMTEL has invested US $23 million in the Next Generation Network (NGN) that will improve internet services for fixed telephones.
Speaking after a tour of some of the NGN exchanges in Lusaka, Zamtel Corporate Communications senior manager Kennedy Mambwe said the NGN is in their rollout plan that would see all districts in the country have improved internet services through their fixed lines.
“Currently some parts of Lusaka are already using the NGN. About 1000 households in Kabulonga are already connected and we are going to increase on the number after the resoponse improves,” he said.
RP Capital, before barking from the top of a hill, PLEASE ENLIGHTEN US ON THE STORY IN THE JERUSALEM POST, concerning the Selling of a Turkish Bank!!!!
Abena “Dezo”, iyo canter bushe ta ikwete tu “Radiation” twa pa “Fukushima???”
In all my life I have never heard of a trial that hears only ONE side of the story. But that is the case in king cobra Sata Kingdom
Dora Siliya is headed to prison, like it or not.
These guys who have never been to school they think it easy to nail Dora just because he a minister then.There are systems in Zambia to sell government assents or to give it away hust like the council guest lodge in Mpika has been given away.At least Chiluba sold council houses even at K10,000 but not giving free.So Dora is inocent in Zamtel .What the present government can do is just nationalise Zamtel as simple as that and pay Lybia their money.It is not difficult to do that.Kaunda nationalised all the companies in Zambia in 1968 including the mines.So what is Zamtel compared to the mines.
Nampundu @24, you are absolutely right. ZAMTEL was as good as dead and it was the reasons mobile phone services remained prohibitively expensive in zambia for a long time. The company had too much innertia and was inept. It was poorly financed, loss making and losing market. The trouble with most of the kids on LT is they think utopia. life is about decisions and of course errors and even fraud may occur, but on the matter of ZAMTEL the bigger picture is that the Government did the right thing to seek a private partner and remove ZAMTEL monopoly on the gateway.
No. 31 Gilbert Lubinda, renationalise, God forbid. It would cost a lot of money that the country so desperately needs. The company should not be returned to Government. Perios. My advice is for the status quo. As I understand it Government is bound to profit big time should Zamtel perform well under this owenership structure anyway. The other option is to IPO the company on the LUSE, but this would be tricky as it would require forcing the current shareholders to offload some of their shares. Also I find it difficult to believe an IPO would succeed considering all the hallubaloo that’s going on.
I certainly would be very weary.
@10 hell bent, just give your side of the story maybe some one will listen, instead of insulting a tribe you love to hate as this will always work against you. Nsele shobe…
Zamtel is efficiently run today by noble professionals, give progress a chance!
RP, are very carefull in their submission to LT. RP have not not told us why and how they were hand-picked or single sourced as advisers to government in the sale of Zamtel. RP have not touched on why ZESCO was forced to surrender use of fibre technology to Zamel by Ministry of Finance as part of their (RP) advice. It was a matter of life and death the acquisition of fibre facility from ZESCO, WHY????????
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