What follows from this is the conclusion that European colonization of Africa was not the only way of Africa’s entry into the global system of the twentieth century. Africa could have made such an entry without suffering either the agonies of the slave trade, or the exploitation of colonization or the humiliation of European racism. (Ali A Mazrui The Africans -a tripleheritage).
The Bemba have a proverb mumbwe pakubosa nishi pali uko ashintilile (implies people don't always make empty statements)
And so, do those us that espouse economic policies that seek the recapitalization of our bankrupt companies without the subjugation of national interests have a leg to stand on?
When Mr. Agarwal the majority shareholder of Konkola Copper mine Plc, through his parent company Vedanta - founded the company in 1979 he was a scrap-metal merchant with ambitions to own a cable-making company. By the early 1990s, when India embarked on the liberal reforms that were to enable him to make his fortune, he was battling to establish a modest copper smelter. But in the past two years the market capitalization of Vedanta—named after Mr. Agarwal's mother—has increased fivefold to $10 billion. Recently 20% of the group's flagship company, Sterlite Industries, one of India's biggest producers of zinc, copper and aluminum, was floated on the New York Stock Exchange for over $2 billion—the biggest overseas sale of shares by an Indian company. Vedanta has turned over $6.5 billion, an increase of 76% on the previous year, and nearly half of it profit through is operations of assets in India, Australia and Zambia. Agarwal plans to build Vedanta University, India's answer to Stanford, in eastern India; he has pledged $1 billion.
If a scrap metal merchant found options on the international money market, to recapitalizie his family business to extent that he now owns Zambia's most productive mine;
The Zambian government should have and must now, begin to examine the options for transitioning ownership through the use of leveraged recapitalizations, typically referred to in industry parlance as a recap. Many business owners and their professional advisors often overlook this viable alternative when considering a transition in ownership. With today's improved merger and acquisition market and increased valuations for privately owned companies, many business owners are considering selling their companies to gain liquidity for the asset that usually represents the majority of their wealth.
In Zambia today, the most successful state owned companies like Zamtel or Zesco may have a near equivalent worth of their book value. This higher value or "going concern" value is attributable to a company's ability to generate consistent earnings and cash flow growth over an extended period of time. A recap can be a feasible alternative in the right circumstances to access this value. A recap can be a very attractive option for Zambian owners ( the people thru GRZ) who are bullish on the future of their businesses and want to retain a meaningful ownership interest with the opportunity to receive yet another payoff in the future when the financial sponsor (private equity firm) sells its position. The proceeds from the recap and subsequent sale can often exceed the value obtained through a sale. In addition to obtaining substantial liquidity to diversify investment, the business owner (the Zambian people) will continue to operate the business with considerable autonomy (many sponsors will even accept minority ownership positions) and gain access to capital needed to support future growth. Simply put, a recap is a restructuring of a company's balance sheet. The financial sponsor will arrange new senior bank debt and perhaps subordinated debt in addition to providing the bulk of the equity to consummate the transaction. The owner's stock will be exchanged for cash and a portion of the capital stock of the newly capitalized entity. The end result is a substantially different capital structure for the company going forward.
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