TelOne has said that government debts are among the main reasons why the company is failing to meet some of it’s obligations to local creditors. The $93 million in unpaid debt, is slowing down TelOne in many aspects outside of meeting obligations.
The biggest home internet service provider was also slapped with an $8.9 million penalty by ZIMRA for late settlement of taxes which the Herald reports as being the result of “liquidity challenges brought by late settlement of accounts by various customers, mainly the government.”
TelOne Managing Director Chipo Mtasa spoke on the impact this is having and some of the action the company has taken to improve the situation:
Delayed settlements by debtors continue to have a negative impact on the company’s ability to settle critical and contractual obligations.
To this end, we have put in place different strategies for debt collection including blacklisting or litigation where necessary. This has resulted in 26% increase in collections of at least $64 million between January and May this year.
Overall, TelOne reportedly owes US$383 million to a number of lenders who include Eksport (US$13.8m), Eximbank (US$9.5m), BNP (US$36.2M), ADB (US$89.9m) and KFW A11 (US$12.6M).
It’s quite ironic that the same government that has claimed that they want to get TelOne off their hands by selling a large stake in the company continues to make the company less attractive to investors. It’s not much of a surprise that thus far nothing has materialised even though plans to privatise TelOne emerged close to a year ago.
Previously, Chipo Mtasa said it would be difficult to privatise unless the government took over these debts. That position is still pretty accurate regardless of how many deadlines the government gives them.