No sale of SOEs for now
08 November 2019 | Government
Owing to government's precarious financial state, public enterprises minister Leon Jooste was asked whether there were any plans to raise money by partially disposing of some commercial assets, as was the case with MTC.
Jooste was of the opinion that certain SOEs are not suitable to be sold, owing to corporate governance concerns at these entities.
This publication recently did an assessment in which it found that a number of SOEs were without permanent chief executive officers. A number of SOEs also do not publish their annual financial results, a key requirement for listing.
“You need to be a very healthy, well-governed entity to consider listing, so at the moment there is no candidate for listing. In the long term there may be other candidates that could qualify and that might be viable but in the short-term, there is not anything,” Jooste said.
To list on the NSX, a company should have a current audited profit of at least N$500 000 annual revenue before taxation and interest. Companies are also required to cede a minimum 20% of the shares to be held by the public while auditor's reports for the previous three years should be available. The said company should also have an acceptable record of business practice and management integrity, according to the NSX. If one had to consider the case of a commercially oriented SOE like the National Petroleum Corporation of Namibia (Namcor)that the government could hypothetically sell, it misses the mark for listing, having failed to submit annual reports for the periods 2017/18 and 2018/19, failing to meet the requirement of submitting three consecutive financial reports. The same can be said for TransNamib that could hypothetically be put up for sale. It is yet to publicly release its annual reports except for the 2018 financial year.
Namibia Housing Enterprises (NHE) also finds itself missing the mark of having submitted annual reports for three consecutive years.
Touching on the issue of MTC, Jooste said everything was on track for its successful listing on the local bourse. While the government is expected to hold onto its two-thirds shareholding through Namibia Post and Telecommunications Holding (NPTH), the remaining MTC shares are expected to fall in private hands as a result of the listing.
“The MTC listing process is on track. It is a very complicated process to meet all the requirements that have been set up by the Namibia Stock Exchange. If all goes according to plan, they will be able to list by the middle of next year … it is completely on track,” he said.
The mobile operator kicked off its listing process in January when it placed a bid in local media through NPTH. NPTH owns Telecom, MTC and NamPost on the government's behalf.
Government had first announced the planned listing of MTC in 2016. Government had at one point also flirted with the idea of buying Samba's 34% stake with a loan from the Government Institutions Pension Fund (GIPF).
IJG Securities and PSG Wealth Management Namibia were announced as joint sponsoring brokers for the listing project in May. MTC executive Tim Ekandjo said the mobile operator expected listing on the NSX by July 2020.