LAP Green Networks has committed to investing $129 million in Zamtel over the next two years to create a “truly competitive” and world-class telecommunications company, LAP Green Networks' newly appointed chairman, Wafik Alshater, has revealed.
This comes only a few days after the Zambian government decided to reverse the sale of 75% of shares in Zamtel to LAP Green Networks.
Alshater warned that, should the Zambian government stick to its decision, the situation will not only be damaging to the telecoms industry in Zambia, but would also send a negative message to those looking to invest in the country.
“The new management is determined to safeguard the legally acquired assets. We will pursue all options and do everything possible to retain our stake in Zamtel - a highly prestigious part of our pan-African network,” Alshater said.
However, Zambian president Michael Sata responded by declaring a showdown with LAP Green Networks, saying his government is ready to face the Libyan company.
Sata said it was surprising that the company has decided to take a confrontational stance, despite the main issues surrounding the transaction.
“The Libyan firm's intention to fight government's move to repossess the company to the bitter end is unfortunate,” said Sata.
The 75% majority shares were sold in June 2010 for $394 million (R2.9 billion) to allegedly save the company from closing after the previous Zambian government failed to racapitalise it.
Alshater said that, since the acquisition by LAP Green Networks, Zamtel has attracted more than 400 000 new customers and has grown its market share from 3% to 11%. LAP Green Networks also claims that it has invested $170 million in the expansion of the company's network capacity and coverage since the purchase.
LAP Green Networks, Alshater said, looks forward to continuing to develop Zamtel into a leading telecoms company in Zambia, working with its partners in the investment. The Zambian government still owns 25% of the company's shares.
George Kunda, former Zambian VP in the regime that sold Zamtel, warned last month that reversing the sale of the company would erode investor confidence in the Zambian telecoms market, as the security of their investments would not be guaranteed.
LAP Green Networks is the telecommunications investment arm of the Libyan African Portfolio (LAP), focusing on the telecommunications sector in emerging markets. It operates mobile and Internet service provider (ISP) businesses in Uganda, Ivory Coast and South Sudan.
Currently, Alshater said, LAP Green Networks is actively seeking to increase its footprint across Africa and the Middle East.
The company wanted to use the Zambian investment as a launch pad for further investment in the southern African region.
However, the Zambian government decided to reverse the sale of Zamtel to LAP Green Networks last week, following a damning report by the commission of inquiry, which showed that the sale of the company was “[fraudulent] and irregular”.
The reversal by the Zambian government means LAP Green Networks' plans of expanding its investment into other countries in the southern African region now hang in the balance. The Zambian government, however, has not officially informed LAP Green Networks of its decision, claiming it wants to handle the process in a manner that would not adversely affect the operations of the company.
Dora Siliya, the former minister of communications and transport, was warned by a combined team of investigators from the Zambia Police, the Drug Enforcement Commission (DEC) and the Anti-Corruption Commission (ACC) on Monday, 9 January, over the sale of the company.
Police spokesperson Elizabeth Kanjela said Siliya would soon be formally arrested and taken to court for her part in the sale of Zamtel and for irregularly single sourcing RP Capital Partners, of Cayman Islands, to evaluate the assets of the company before it was sold to LAP Green Networks.
Share
