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Cabinet Approves Telone Debt Takeover

FinTech

Cabinet Approves Telone Debt Takeover

Fixed telecommunications network operator TelOne’s US$383 million legacy loans is get in the way of company’s ability to operate efficiently.  The Government has agreed to take over the legacy loans after Cabinet gave its thumbs-up.

“We have been made aware that Cabinet passed a resolution to waiver our legacy loans, and we are currently in the process of engaging the Ministry of Finance and Economic Development in terms of finalising the transaction,” managing director Chipo Mtasa told the Parliamentary Portfolio Committee on Information Communication Technology.

The most of the legacy loans date back to the era of Posts and Telecommunications Corporation (PTC).

TelOne owes a number of lenders namely Eksportfinas of Norway (US$13,8 million); Eximbank of Japan (Sumitomo II) (US$9,5 million); BNP of France (US$36,2 million); Tunisia-based African Development Bank (US$89,9 million); Overseas Economic Co-operation Fund (OECF) JBIC III of Japan (US$152,4 million) and Kredittanstalt Fur Wiederaufbau (KFW 11A) of Germany (US$12,6 million).

For instance, the principal loan from Eksportfinas was $1,664,070. Its interest rate was 8 percent.

However, due to an 11 percent penalty, the debt has ballooned to $13,8 million.

Government has set May 2019 as deadline for privatising TelOne.

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