Mozambique may privatize more than 50 pct of its public shareholdings

29 June 2015

More than 50 percent of companies in which the Mozambican state has a stake are not considered strategic and may be privatised, said the president of state stake-holding company Igepe, Apolinário Panguene told Macauhub in Maputo.

As the they are not included in the government’s “five-year and annual plans” or because the state’s stake is “very small,” more than half of the portfolio of 117 shareholdings that Igepe currently manages is being assessed as part of “a comprehensive strategy for a privatisation process.”

Although the sale of some companies has already started, Panguene said Igepe had faced “some difficulties related to the legislation itself,” especially in cases where the State has a minority stake and partners “have preferential rights,” which causes delays.

An alternative to the sale of private state interests is the sale of public shares to company managers, technicians and workers, known as the GTT group, and the Igepe 2013 annual report and accounts flagged 15 companies for this process.

The Mozambican subsidiary of construction company Soares da Costa, which recently changed its headquarters from Lisbon to Luanda, and in which the Mozambican state holds a 20 percent stake, is one of the companies referenced in this process.

Asked to comment on the apparent crisis situation the construction company is facing the President of Igepe admitted that the situation was worrying, but stressed that “what is happening out there is not what occurs in Mozambique”, where the company “continues to have work and even posted profits in 2014.”

This is why, he added, the process of selling stakes to the company’s GTT group is still in place, and they may reject that option, which will mean the stake will be given back to the Mozambican state.

Panguene admitted that Mozambique Cellular (mCel), Mozambique Airlines (LAM), Telecomunicações de Moçambique (TDM) and Transmarítima, which are the responsibility of the Ministry of Transport and Communications, wee having difficulty “adapting” to the new dynamics the Mozambican market.

Giving the example of mCel, the first mobile operator in the country, the President of Igepe said the state can free itself of its 26 percent stake in the company, “although no decision has been made,” since the market situation is different nowadays, with three operators.

In terms of Mozambican airline LAM, which dominates the domestic market, and in a sector in which three new companies may start operating, Panguene stressed that the company would have to “adjust to the market and try to compete with the same weapons that others have” expecting, moreover, “a better service, more efficiency and at lower cost.”

Regarding Igepe’s 2014 annual report and accounts, due to be presented soon, Panguene said it would “show profits,” as it did in 2013, when the institute had revenues of 68.2 million meticais, but which was a downturn of 33 percent over the previous year.

This, he explained, was due to the companies’ investment policies, as was the case with Coca-Cola Sabco, Cervejas de Moçambique and Mozal that are seeking “to consolidate their position in the market.”

As for new business areas, Igepe has “sought to identify partners with financial and technological capabilities,” and the aim is to boost sectors such as gas and coal exploration, with ventures that “add value,” for example, “energy production or derivatives such as methanol and fertilisers.” (macauhub/MZ)