THE Mutapa Investment Fund (MIF) intends to retain a significant minority stake in the state-owned bank, POSB, when it is partially privatised, ensuring continued influence over its operations, the Zimbabwe Independent can report.
POSB's privatisation plans were temporarily halted in August 2023 when the government decided to place the bank under MIF, along with 29 other entities.
“Regarding the partial privatisation of POSB, that was started a few years back. We are aware that KPMG were the independent advisors on that transaction,” MIF deputy chief investment officer Ernest Denhere said in an interview.
“We will be reviewing that transaction with management and the board of POSB as well as KPMG to understand the status of that exercise.
“But, in terms of whether there will be a change of approach given that POSB is now under the fund that is not necessarily the case.
“That is not exactly the case because our mandate is to seek to optimise the entities under our portfolio and there will be instances where we look for strategic partners or deploy our capital into those entities,” he added.
As at March 31, 2024, POSB’s total assets stood at ZW$1,21 trillion (US$54,86 million), against a budget of ZW$1,12 trillion (US$50,78 million.)
Significant growth in lending and investing was recorded during this period, resulting in a positive budget variance.
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Denhere reaffirmed that the partial privatisation agenda aligns with the fund’s overall investment strategy
“We just need to look at it with a fresh pair of eyes and look at the partners or strategic investors that KPMG had identified and seek to help the board, and management, with that transaction,” he said.
“As you know, POSB at the moment is a state-controlled entity, but we do have a mandate to also just have state invested entities where we are not the controlling shareholder, though we have a significant minority stake to influence the strategy of that business.
“So, I think that will depend on the offers we get from the short-listed potential target investors in terms of the equity stake that they will seek to have in POSB.”
According to POSB, at the time of the suspension of the privatisation process, outstanding work streams included procuring a private investor and completing deliverables for the initial public offering (IPO).
The bank’s board is expected to consider available options to conclude the partial privatisation project.
“The ultimate (goal) will be having a bigger bank and also partnering with a strategic partner who has got the same sort of objective, social development like ourselves,” POSB acting chairperson Israel Ndlovu told the Independent.
“As far as how to do it is concerned, the initial strategy was to get the strategic investor first of all and then move on to an IPO because we would be a public bank eventually but at the moment, we are open to either.
“We can start with an IPO then look for the strategic investors, but it is fluid at the moment.”
The MIF has been preparing for full-scale operations since President Emmerson Mnangagwa renamed the Sovereign Wealth Fund to MIF last year, assigning it oversight of 30 parastatals, including some facing insolvency.
MIF’s influence extends to about 36 other companies controlled by these state-owned firms, including the Cold Storage Company (CSC), National Railways of Zimbabwe, Air Zimbabwe, Zimbabwe United Passenger Company, and more.
Amongst them are, Kuvimba Mining House, Silo Investments, National Oil Company of Zimbabwe, PetroTrade, POSB, TelOne, Arda Seeds, Zimbabwe Power Company, Powertel Communications, Allied Timbers, Telecel, Industrial Development Corporation, Hwange Colliery Company Limited, power utility Zesa Holdings and Fidelity Gold Refinery.
This extensive portfolio makes MIF one of the country’s most strategic and influential entities.
However, the fund faces the challenging task of revitalising troubled assets, whose contribution to the gross domestic product has plummeted from 40% during the 1990s boom to 12% in 2021.
With regards to CSC, the meat processor owns ranches, which include Maphaneni, Dubane, Umguza Chomfukwe Dubane Umzingwane-Railway Block Gwanda, Chivumburu, Mushandike Ranch (Meyers Rust), Zeederberg Belwigwe, Willsgrove Feedlot and Darwendale.
Its Bulawayo operation has Africa’s largest slaughtering facility, second only to Botswana Meat Commission in terms of the latest technologies.
