Zimbabwe's National Oil Company in Bid to Raise Equity Capital; Experts Skeptical

Energy industry sources said NOCZIM, now operating at 30% of its capacity and laying off thousands of workers, is negotiating with the Harare government to retain a controlling 51% stake in the enterprise after raising equity capital
Jonga Kandemiiri & Gibbs Dube
Washington 17 May 2010
The National Oil Company of Zimbabwe is planning to sell a 49% share stake in an effort to raise capital to pay US$270 million in debt which threatens the survival of the state-controlled enterprise.

Energy industry sources said the company, now operating at 30% of its capacity and laying off thousands of workers, is negotiating with the Harare government to retain a 51% stake. The sources said NOCZIM had to shut down projects including plantations of jatropha intended to produce biodiesel, among and other unprofitable activities.

Harare economist John Robertson told VOA Studio 7 reporter Gibbs Dube that it is unlikely investors will buy shares in the state-run company as it lacks credibility given past losses and reports of internal abuses.

Elsewhere, the Reserve Bank of Zimbabwe has revised national totals for domestic and external debt, which now stand at a combined US$5.84 billion. Zimbabwe owes around US$5.3 billion to international lenders, much of which has fallen into arrears, preventing the country from accessing new lines of credit from public financial institutions.

Economist Prosper Chitambara of the Labor and Economic Development Research Institute of Zimbabwe told reporter Jonga Kandemiiri that the national debt has surged due to Harare’s inability to make payments