Chibamba Defends Govt Over ZAFFICO

Chibamba Kanyama

CHIBAMBA Kanyama says the reason why there are many speculations about the ZAFFICO issue is because there are hidden values that have not been made public by Government.
Mr Chibamba whose a renowned economist said in an interview that the listing of ZAFFICO shares is a good transaction that has just been politicised.

“I think it(sale of ZAFFICO) has just been politicised, it is just a normal transaction. Government has intimated, it has given an indication that we are going to sell the portion of these shares on the market. The only challenge is that there hasn’t been too much communication. In my view, Government is still looking at mechanisms, how much will they sell? Who will be the brokers who will be the financial arrangers. To list, is a process but there has been an indication that they want to sell the portion of shares of ZAFFICO. Unfortunately, there are certain undercurrent, people asking why are you selling it? What we call intrinsic value. Intrinsic value is something that is not known by either the seller or the buyer. It is hidden value which you get to know later. The reason why people are asking is because there is an hidden value to this transaction that has not been made public and that is where the problem is,” he said.

Kitwe residents rioted when rumur went round that ZAFFICO had been sold to Chinese investors.
Government moved in to clarify that the parastatal firm had not been sold but that its shares have just been listed on the Stock Market Exchange.
But United Party for National Development(UPND) vice president challenged Government to state the difference between listing shares and selling a company.
When reached for a comment, Mr Kanyama explained that there is a difference between listing shares and selling a company.
He said shares in the company can be listed without necessarily selling the firm.

“Floating of shares, you really don’t know who your taker is. you are not negotiating across the table on the pricing of that particular stock. So, you simply float it around and you give an indicative price which they call initial public offering. You are floating shares to whoever can afford those shares and you can affload a certain number of shares at a given price and it is give or take, it is either you leave it or you take it. That is a difference. In terms of selling a company, you can go through floating the shares. You can sell a company through floating the shares on the Stock Exchange. That is one way of selling a company or you can sell a company by simply approaching potential buyers. There is what they call private placement. You identify who you want to buy the company. You may approach them that you are selling a company. This can be a portion of the company or the whole company and you tell them how much you are selling then you negotiate unlike floating. There people who are specialised in selling a company which is not doing well, they work on it for two to four years, revamp the operations and it begins to show profits and then they go to individuals that we are selling this company. We have had companies that have been sold like that.Finance Bank was sold to the new owners now Plus mara without going through the Stock Market , it was just a sell between two parties,” he said.

Source:Kwacha Celebrity Newspaper