Workers eye MTC bonanza
Government has been left high and dry, after GIPF confirmed it will not be financing the purchase of shares in MTC, but will acquire them for itself.
29 March 2018 | Business
Government had approached GIPF in the past with a view to have the fund acquire the shares on its behalf, but had the rug swept from right under its feet yesterday when the pension fund said it would not be funding anyone, let alone government, to buy shares.
The MTC shares are up for grabs after Samba Dutchco B.V indicated that it would be selling its 34% stake in MTC.
Government currently owns 66% of the shares in MTC through the Namibia Post and Telecom Holdings (NPTH).
It was previously intimated that government would snap up the foreign-owned shares through NPTH and that this transaction would be financed with GIPF money.
Providing an update on the matter, GIPF spokesperson Daylight Ekandjo said yesterday: “We are in talks with relevant stakeholders that could see GIPF acquiring a substantial shareholding in MTC. This process will follow a due diligence to determine if we want to buy the shares which will be based on merit.”
According to her, GIPF is required under pension fund regulations to invest locally and a potential investment in MTC could help fulfil that objective.
“We are also of the opinion that should the due diligence find the MTC shares feasible it would be a good investment which will be done in our own name and not on behalf of any other entity,” Ekandjo said.
The GIPF, Ekandjo added, was on a constant quest to invest in high quality local assets at a good price and which offered market-related returns to its members and beneficiaries.
National Union of Namibian Workers secretary-general Job Muniaro welcomed the development, saying MTC would be fully localised if the GIPF deal goes through.
“It is good for us; Namibians will now have ownership of MTC. The money will not go out of the country and it is a good move for MTC to be owned 100% by Namibians,” Muniaro said.
Former information minister Tjekero Tweya first announced plans on behalf of government to acquire the 34% stake in MTC in 2016.
“Cabinet took note of the progress made with regard to the buyback of the 34% foreign-owned shares in MTC,” said Tweya.
The initial plan to buy the outstanding stake would see government, through NPTH, own a 100% stake in MTC for some time before reducing its shareholding to 51% by selling a stake to GIPF, and listing a portion on the local stock exchange.
To proceed with the deal, NPTH needed the approval of the Communications Regulatory Authority of Namibia (Cran).
Cran had longed lobbied to have the MTC stake sold to private entities instead, to encourage competition in the telecommunications sector.
“The decision would be non-compliant with the Act in that it will reduce competitiveness in the telecommunications market. There would be a reduction in private investment, and a reduction in local participation,” an official Cran document read.
NPTH, through board chairperson Ally Angula, rejected the conditions attached by Cran in terms of the MTC shares' deal.
She wrote to Cran in December last year, saying its fears of a possible monopoly were incorrect, and also played down the proposal to allow a minority shareholder to run the company, instead of government.
The battle for the MTC shares intensified last August when Tweya removed Angula as a NPTH board chair.
“The acts you have committed and such acts brought about the distrust, and therefore, as the appointing authority, I view such behaviour as unacceptable,” Tweya said at the time.
Angula has since been reinstated as NPTH chairperson.
Finance minister Calle Schlettwein in December 2016 dismissed the notion that the GIPF was merely bankrolling government acquisitions.
“There is a notion that government has its hands on the kitty of the GIPF. We cannot dictate to the GIPF what to do with its money,” said Schlettwein in response to whether government had compelled the GIPF to fund the acquisition of MTC shares.
“The shares will be warehoused by the GIPF. MTC is a well-managed company,” he said. Schlettwein said the government has liquidity problems, hence the use of GIPF money to buy the shares.
Warehousing is a procedure which sees one company gradually building up shares it wishes to transfer to another entity in future.