eBusiness Weekly
Business Weekly/NewZiana
Plans for the partial privatisation of the People’s Own Savings Bank (POSB), have been completed and now await presentation to, and final greenlight from Cabinet, a top executive of the bank has said.
Government, which now wholly owns the bank, plans to partially privatise POSB as part of its deep overhaul of the poorly performing public enterprise sector.
Under the reforms, most of the parastatals will either be privatised or capitalised to be able to perform better, and reduce their reliance on state bailouts.
Only a few have been slated for shut down.
POSB chief executive, Admore Kandlela, said the bank’s partial privatisation will either be a private placement with a strategic investor, or an initial public offering. A hybrid of the two was also considered.
The bank is one of the best performing government-owned business entities, inspite of a myriad of challenges obtaining in the local financial sector.
It has consistently declared dividends to government, a rare feat in the public enterprise sector in recent years.
“As far as this (partial privatisation) is concerned, we have completed the strategy formulation process of partial privatisation, namely whether to do a private placement, initial public offering or a hybrid of these,” Kandlela said.
“Consultation with all key stakeholders is complete and a cabinet memorandum is to be prepared for presentation by our minister to Cabinet,” he added.
The partial privatisation of the POSB will involve government offloading a minority stake, and the proceeds used, in part, to capitalise the bank.
Although the final mode of privatisation is yet to be determined, it appears the bank is leaning towards a private placement with a strategic investor.
“In partial privatisation, government will offload part of its stake to capitalise POSB amongst other national strategic and fiscal interests. The minimum we would expect to raise is what will get us to a minimum capital requirements as per RBZ (Reserve Bank of Zimbabwe),” Kandlela said.
“Certainly, the intention is to go into a strategic partnership with a partner who shares POSB’s vision as per its mandate and has the essential capital or technical expertise in advancing such interests. What we have specified are the critical success factors for identifying a partner who is acceptable to government,” he said.
Most Government companies are operating at a loss, in the process depending more on Government bailouts. The State companies have been described as a missing link in economic turnaround.
