The ZPA is pleased to announce the sale of NIEC Overseas Services Company Limited (NIECOS) to the management and employees of the company following the success of their proposal for a management and employee buy-out (MEBO).
The Minister of Finance Hon. R.D.S. Penza has signed the sale agreement after receiving clearance from the Attorney General. The sale will achieve one of the ZPA's prime objectives, that of management and employee participation in equity and profits which in turn provides for wider participation in the ownership of assets of the trading sector.
The deal was negotiated by Mr Mwila Lumbwe as team chairman and Mr Sangayakula Sanga as co-chairman. The MEBO team was led by the General Manager Mr Festus Sichalwe, assisted by the then finance manager Mr Sabrawal. The negotiators relied heavily on the independent valuation conducted by Coopers & Lybrand.
NIECOS was incorporated in 1974 with its head office in Lusaka and a branch in London. Its initial role was of a confirming house procuring goods on behalf of Government and parastatal companies.
The London office was later closed and operations consolidated in the Lusaka office and which in turn established duty free shops on the line of rail. NIECOS was 100% owned by the now defunct NIEC and later ZIMCO.
NIECOS was advertised for sale on a competitive bid basis from November 1995 and bids were received in February 1995. The bid by the MEBO was the only bid received and after protracted negotiations the bid was assessed to be acceptable.
NIECOS was sold for a price consideration of K 250 million, of which K 50 million has been paid, another K 50 million is to be paid in January 1996 with the balance being paid in full with interest by January 1998.
NIECOS operates six outlets as follows; two foreign currency shops in Lusaka and Kitwe, two local currency supermarkets in Kitwe and Chingola, and two liquor shops in Kitwe and Ndola. NIECOS owns the Chingola outlet while the rest are rented. The MEBO plan to open two more supermarkets in Ndola and Lusaka by 1996.
Under its initial development programme, the MEBO team will invest approximately K 600 million over a period of five years in order to upgrade NIECOS. This will help achieve another of the ZPA's objectives; to provide world standard merchandising and retailing services to the citizens of Zambia, as reflected in the range, availability, quality, and prices of goods, as well as in the level of customer orientation and services offered.
Negotiations with Jaegers, a top departmental store of London, and Camus International Ltd-- producers of top grade cognac, have reached an advanced stage.
The MEBO are committed to retraining its employees on an on-going basis. It is the ZPA's hope that the acquisition by the MEBO will contribute to revitalising the trading sector which has for years, failed to provide the Zambian consumer with even basic levels of customer service or quality goods.
Zambian participation is considered important by the ZPA and this deal goes to demonstrate our continued work in achieving this objective.
7 November 1995
Back to Zambia Privatisation Agency (Zpa) Home Page | Back to Press Releases Menu