ZimRe Holdings says it will assert its 49% interest in state-run bus company Zupco, after government indicated the shareholding, which it values at $250 million, was up for sale.
Government has announced plans to revive Zupco, which it wants to anchor a mass urban transit system for the country. In terms of the plan, government has moved to procure 1,000 buses to renew Zupco’s fleet.
President Emmerson Mnangagwa last month officiated at the hand-over of the first batch of the new buses. Government says more buses are expected from China, Belarus and South Africa.
In a statement appended to ZimRe’s 2018 financial results, chairman Ben Kumalo said the company, which also has insurance and property assets, was still keen on Zupco.
“ZHL holds a 49% equity in the Zimbabwe United Passenger Company and has been a dormant shareholder in that company since 2004,” he said.
“The board of ZHL is now seized with re-establishing active participation and its rights as a shareholder in the company.”
Finance Minister Mthuli Ncube told journalists after Tuesday’s Cabinet meeting that government owned 100% of Zupco, but was looking for private investors to take up 49% shareholding in the company.
“We want to see a situation where a private investor is able to take up a stake of 49% f Zupco. It used to be like that, by the way, until about 2004, then it changed and government took over 100% of the company,” Ncube said.
“The 40% used to be owned privately, then the private group sold to government. We have no difficulty offloading 49% as government, but we want a cash injection of no less than $250 million into the company. That will go a long way in revitalising the infrastructure.”
While government and ZimRe appear to be on a collision course over Zupco, a full-scale ownership war is unlikely due to an intricate web of common shareholdings and corporate networks involving the two entities.
Government directly owns 22% of ZimRe and has influence over the National Social Security Authority, a 15% shareholder in the group.
Day River Corporation, linked to Pioneer Transport co-founder Hamish Rudland, is the single biggest shareholder in ZimRe, with 40%.
ZimRe has found NSSA, with government’s active support, a game ally in the battle against Nicholas van Hoogstraten for the control of conglomerate CFI Holdings.
To add to the corporate intrigue, ZimRe chairman Kumalo is employed by government as managing director of its Industrial Development Corporation.