- August 21, 2020
- Posted in NEWS
Zimbabwe is seeking an established global petroleum giant to partner the merged entity of three state-owned fuel retailers, Business Weekly can reveal.
Last year, the Cabinet approved the merger of Petrotrade and Genesis, subsidiaries of the National Oil Company into fuel retailing business, as well as CMED Fuels.
Thereafter, the consolidated entity is to be privatised through strategic partnerships.
In a recent update on restructuring of state-owned entities, the Treasury said the identification of a partner has already been approved by Cabinet.
“Already, a proposal towards the identification of a potential strategic player in the petroleum oil industry, has been approved by Cabinet,” said the Treasury.
CBZ and Manokore were initially appointed as transaction advisors. However, the technical committee recommended cancelation of the tender because of the high fees.
Under the proposals, Petrotrade and Genesis Energy, together with CMED’s fuel retail component, will be merged to enhance the resultant entity’s value, attractiveness and competitiveness ahead of negotiations with prospective strategic partners.
Government intends to sell its shareholdings in several entities as it seeks to improve efficiency and lessen spending pressures on the budget. Zimbabwe either partly or wholly owns 92 companies, most of which have been making losses for years largely due to mismanagement. Poor corporate governance has also been partly blamed for keeping potential investors away.
However, Finance and Economic Development Minister professor Mthuli Ncube, recently said the majority of public enterprises are now upholding good corporate governance standards in line with Public Entities Corporate Governance Act.
Citing an unnamed survey, Prof Ncube said 80 percent of public enterprises were now providing annual reports to the shareholder.
Previously, some state-owned companies would take several years without holding annual general meetings or reporting financials. Some of the entities the government is seeking to reduce its stake include telecommunications companies, NetOne, TelOne and Telecel. The Government is seeking equity partners for the national airline, Air Zimbabwe and the Zimbabwe Iron and Steel Company.