TelOne Urges Zimbabwean Government To Take Over Its Debt
A senior executive at Zimbabwe’s telecoms operator, TelOne, said that the Zimbabwean government should take over TelOne’s legacy debts that amount to over $383 million in order for the company to realise a meaningful value out of the privatisation process which is currently underway.
The State-owned fixed telecoms operator is practically insolvent due to all the legacy loans that date all the back to the era of the Posts and Telecommunications Corporation (PTC) in the nineties.
The loan balances have only sky-rocketed to these shocking levels because of penalty interests rates.
According to the Herald, approximately 54 percent of the debt amount is actually the accumulation of interest and arrears.
The balance sheet comes into play in the process of calculating the value of a company and TelOne being an entity with far more liabilities than assets will not be the most attractive to many potential investors.
This was declared by Chipo Mtasa, the Managing Director of TelOne, recently while she was speaking to members of Zimbabwe's Parliamentary Portfolio Committee on Information Communication Technology following a tour of the Mazowe Earth Satellite Station.
Mrs Mtasa said that if the government were to go into discussions with potential investors without having paid off TelOne’s legacy debts, it was highly unlikely that they would receive fair value.
Credit: This article originated from www.herald.co.zw