Africa-Press – Angola. The Government of Angola should proceed this year with the privatization of companies such as Unitel, Banco de Fomento Angola (BFA), the insurance company ENSA and TV Cabo, reveals Patrício Vilar, from IGAPE.
The president of IGAPE, the entity that manages the privatization program in Angola, expressed satisfaction with the results obtained in the first phase of Propriv, but Patrício Vilar stresses that the best “is yet to come ” . Propriv was approved in 2019, integrating 195 assets and companies, but it has been undergoing changes, with goods entering and leaving, with a new phase of the program having been announced this year, which will last until 2026.
Of the total number of assets initially contemplated, 93 processes were concluded, and Patrício Vilar considers that the objectives were achieved, taking into account that in this phase, assets such as industries, agro-industries and farms were essentially sold. “ If we consider that most of these were assets, I am very satisfied, that is, the filet mignon was yet to come ”, said the head of the State Asset Management and Participation Institute (IGAPE) in an interview with Lusa.
Of the 93 finalized processes, 955 billion kwanzas (1.6 billion euros) were contracted and 571 billion (976 million euros) received, while contracts canceled due to non-payment represent 2% of the total.
“ We had a big challenge, this program could not continue to ‘borrow’, we had to find a model that would allow the business community to have access to the program and it was decided to make seven-year contracts with a two-year grace period”, he advanced, thus justifying the deferred payments and the difference in revenue between contracted and received amounts.
“If we consider that most of these were active, I am delighted, that is, the filet mignon was yet to come.”
Patricio Vilar
Even so, “our expectations were lower than what happened”, taking into account the pandemic and the macroeconomic context, which only “turned around at the end of 2022”, underlined Patrício Vilar. Because ” one thing is selling assets, real estate, equipment at public auction, another thing is selling companies “, he said, underlining that this process takes much longer, especially when it comes to stock exchange operations, as happened with the Angolan State’s holdings at Banco Angolano de Investimento (BAI) and at Caixa Angola, sold last year.
In addition, many of these companies enshrine preemptive rights in their shareholder bylaws, which required “a significant negotiation process” to reach an agreement with shareholders.
The main advantage of a privatization on the stock exchange, underlined the manager, “is that there are no impairments, you can only bid by paying”. On the other hand, only “healthy” companies that meet “minimum market requirements” can resort to this mechanism, which, he acknowledged, is not characteristic of the vast majority of Angolan companies.
This year, IGAPE is expected to begin the sale of some of the most attractive companies, including Unitel, although Patrício Vilar is cautious about deadlines. “ As this is an IPO (Initial Public Offering), it is not worth speculating when we are going to end it ”, he said, noting that scenarios are still being analyzed, namely whether the State will maintain any participation. So there’s no rush, he emphasizes. Patrício Vilar considers that 18 months will be a “reasonable period” for privatization.
Banco de Fomento Angola (BFA), insurance company ENSA and TV Cabo are other companies to be privatized via the stock exchange this year, according to Propriv’s schedule, published on March 28 in Presidential Decree n. 78/23. “ We have already agreed with BFA that they will be the ones to conduct the financial intermediation of the process, the challenge is that there is not just one shareholder, there are two (the other is BPI, 100% owned by the Spanish group Caixa Bank) and it is necessary conciliate strategies regarding the future of that asset ”.
The privatization process of the State’s shares in Endiama (national diamond company), in the state-owned oil company Sonangol, and in the Bodiva stock exchange, will be launched through an initial public offering of shares in 2024, when the Government also intends to move forward. with the sale of the airline TAAG, and the agribusiness Aldeia Nova.
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