The Zambia Privatisation Agency (ZPA) is pleased to announce that the Minister of Finance and Economic Development Honourable RDS Penza has signed the Sales Agreement with the Management Employee Buy Out (MBO) Team/Equity partner Mr. Gershom Mumba for Zambian State Financing Company (ZSFC) Limited led by the General Manager Mr Lemmy Chunga for the sale of 100% shares in the Company.
The MBO/Employee team comprise the following:
- Mr Lemmy Chunga
- Mr Vickson Ncube
- Mr Rex Nsefu
- Employees
The shares for employees will be held in trust through the employee share ownership scheme. The trust will be created by the employees themselves.
The purchase consideration agreed between the parties is K70 million. Messrs KPMG Management Consulting Limited conducted an earnings valuation using the DCF of future earnings valuation method. The agreed purchase consideration is within the valuation range recommended by the Consultants.
ZSFC Limited was locally advertised and six bids were received :
- MBO Team and Equity partner
- Messrs Crispin & Nkanza Kaumba
- Messrs Nyirenda & Mushamba
- Emerging Market Investments
- Mr Mark Chema Ndilla
- Justin Mwambazi
Upon evaluation of bids by the ZPA Secretariat, the ZPA MEBO/Equity partner bid was found to be more robust in terms of their intended plans for continued profitability of the Company. Management also undertook to retain all employees on their existing terms and conditions of service. Consequently, the negotiating team successfully concluded negotiations with the MBO Team.
To ensure transparency, this transaction was negotiated by an independent team appointed by the ZPA Board, comprising Mr. J. Chisanga, Chairman of the Zambia Institute of Certified Accountants (ZICA) as Negotiations Team Chairman and Mr E. Chipimo as Team Lawyer.
ZSFC is a Registered Financial Institution under the Banking and Financial Services Act 1994, and was wholly owned by the Zambia State Insurance Corporation (ZSIC) Limited. ZSFC Limited was incorporated in 1988, in order to undertake non-insurance investment activities on a commercial basis.
The Company was to offer the following products:
- Estate development financing and management of properties
- Lease financing
- Commercial lending and joint ventures
However due to working capital constraints, the Company has only been able to provide lease finance to a few selected clients.
ZSFC Limited 's head office and operations are in Lusaka and operates from rented premises. The Company has no branch net work.
The acquisition by this team of Zambians, of Zambian State Financing Company Limited marks yet another significant achievement in Government's commitment in ensuring that Zambians participate in the Zambian privatisation programme.
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