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Zimbabwe Seeks to Raise $350 Million Selling Shares in State Firms

FILE: Finance Minister Mthuli Ncube gestures during a media briefing in Harare, Zimbabwe, Oct. 5, 2018.

HARARE (Reuters) - Zimbabwe expects to raise $350 million from selling shares in five state-owned telecommunications companies and a bank, as part of economic reforms being pursued by the government, Finance Minister Mthuli Ncube said on Tuesday.

The southern African nation’s economy is experiencing a severe dollar crunch and faces more headwinds from a drought that has wilted crops and left up to 5.3 million people in need of food aid, according to a U.N. humanitarian agency.

Ncube said the government would dispose of shares in its two mobile phone operators NetOne and Telecel Zimbabwe, the country’s sole fixed line telephony company TelOne, postal services Zimpost and state-owned savings bank POSB.

“Work is already under way to identify transaction advisers. (The) government projects to realise over $350 million from this initial process,” Ncube said in a statement.

He later told a post-cabinet briefing that NetOne and TelOne would be sold as one entity by September and the government would retain at least 40 percent holding.

The Zimbabwean unit of Price Waterhouse Coopers has been chosen as transaction advisers for TelOne and the government also wants the company to advise on NetOne, Ncube said.

He said that South African telecoms giants MTN, which has previously expressed interest in NetOne, and Telkom are some of the companies that would be approached to bid for shares.

“If these entities are still interested, and we will approach them and let them know by the way, and then they have a much bigger asset to compete for. But there will be other suitors that we will invite,” Ncube told reporters.

TelOne, with over half a million subscribers, is saddled with debts of $380 million and incurred a loss of $11.8 million last year, while NetOne, which has 5 million subscribers, swung to a $10 million profit in 2018.

Ncube had said in October that selling state firms, known locally as parastatals, was one of the ways to cut government spending.

The Harare government has targeted selling some or all shares in 43 of its companies, most of which are loss-making and have relied on state bailouts over the years.

Rebuilding the troubled economy is the biggest challenge confronting President Emmerson Mnangagwa, who was re-elected in a disputed vote last July and is seeking to pivot away from some of the disastrous policies of predecessor Robert Mugabe.

Reporting by MacDonald Dzirutwe; Editing by Mark Heinrich

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