THE ROT OF THE ZCCM-IH TAKE-OVER OF INVESTRUST
“ZCCM-IH increasing its shareholding in Investrust Bank from 45 to 71%, what is behind this deal?
“Its loan book is full of broke and politically exposed individuals from a certain political party and from a certain province”.
“This deal was not made on sound business principles but was driven by politics. This is a deal hatched in Lusaka for the Lusaka elites.”
Before we discuss anything more let’s look at the shareholding of the bank before the deal, shareholdingas at 31 December 2016:
ZCCM LTD 45%
Meanwood venture capital ltd 18%
Lupande Family Trust 6%
J.L Shuma 5%
T. Daka 4%
Workers compensation fund control board 4%
Stanbic Bank Zambia Pension fund 4%
Justin Zulu 3%
This bank has been loss making for the last 5yrs, averaging about K41m($4m) per annum.
The losses peaked at K75.5m($7.5m) in 2015. In 2016 the bank was having serious liquidity problems, it risked being deregistered by BOZ until Meanwood venture capital came to it’s rescue. The bank has not recovered, it’s still in a business coma.
It’s loan book is full of broke and politically exposed individuals from a certain political party and from a certain province.
This deal is nothing but pay back for what this struggling bank did for certain politicians and their cadres in 2015.
On 9 April 2018 ZCCM-IH issued a mandatory offer to the minority shareholders to buy all the 56% shares to take it’s shareholding to 100%. At the close of the offer on 30 April only 26% of the shares had been offered to ZCCM-IH.
A total of K24m($2m) was paid for 2.1m shares at K12 per share(at a premium of 4.5%). Yes $2m is not really that much money to pay for 26% shares in a bank but the question is how much is ZCCM-IH going to pump into the bank to make it solvent? How much of the K1bn($100m) depositors money is still ‘available’? Where will this money come from?
This deal was not made on sound business principles but was driven by politics. This is a deal hatched in Lusaka for the Lusaka elites.
The ZCCM-IH board should not forget the main objective the company was formed. There are so many mining projects they can invest it which would add value to Zambia instead of playing politics with peoples’hopes and aspirations.
They should not forget that NAPSA now owns 15% of ZCCM LTD, the pensioners would need the money after retirement.”