A Privatisation Scheme
was prepared by the Privatisation Unit in consultation with the
Ministry of Transport and Communications. The scheme recommended
that majority shareholding in the enterprise be sold to a strategic
investor. Minority shares would be reserved for local institutional
investors and offered to them when the profitability of the airline
stabilises. The scheme was approved by Cabinet in December, 1996.
Sale of the airline was advertised in the “Economist”, “Business
Day” and local newspapers in January 1997. The Unit also contacted
several airlines that had expressed an interest in LAC during an
investor search conducted in May, 1996. No bids were received on the
due date of March 15, but one potential investor, Rossair requested
an extension of three weeks to finalise their proposal. Further
extension was granted, placing the deadline at June 2, 1997. . Two
bids were received from South African airline operators, Rossair
Group and Bass Aviation. Both bidders proposed to buy the assets of
LAC. Following evaluation of the two bids Rossair was invited to
negotiations held in July, 1997. Cabinet approved sale on the basis
of the negotiated sale agreement which provides for a 20%
shareholding for local investors. The sale agreement provides for
the sale of assets for operation of the business (aircraft, spares
and equipment exclusive of equipment for servicing aircraft landing
etc.). It further excludes assets relating to landed properties
which remain under the ownership of Government. All the workers of
Lesotho Airways were paid terminal benefits.
Lesotho Flour Mills
The Privatisation Scheme
for this enterprise was prepared by the Privatisation Unit in close
consultation with the Ministry of Agriculture, Co-operatives and
Marketing following a major consultancy on the implications of grain
deregulation for the milling industry. The scheme recommended that
51% of the Government’s shareholding be sold to a strategic
investor, 10% reserved for employees, and the remaining 39% reserved
for future public floatation. Cabinet approved the scheme in May,
1997. Advertisements for the sale were place in the “ECONOMIST”,
“BUSINESS DAY”, and local newspapers in June, 1997. Three bid
proposals were received from SEABOARD (US); LESOTHO MILLING COMPANY;
AND FRASERS/EASTERN FREE STATE CO-OPERATIVES on August 15, 1997.
Following evaluation of the bids SEABOARD and LESOTHO MILLING
COMPANY were shortlisted and invited to perform due diligence in
order to finalise their proposals. The winning bidder, SEABOARD was
invited for negotiations which were held in October, 1997. Cabinet
approved the sale subject to including of the “Golden Share”
provisions to ensure protection of the vital national interests in
the company. The sale was duly approved in March, 1998.
Basotho Fruit and Vegetable Canners
The Privatisation Scheme
was prepared by the Privatisation Unit in consultation with the
Ministry of Agriculture Co-operatives and Marketing as well as the
LNDC. The scheme recommended direct sale of majority shareholding to
LANGEBERG, who ran the enterprise under a management contract during
the 1996 season. The scheme also recommended selling the company
through open tender in the event that a mutually satisfactory
agreement was not reached with LANGEBERG. Cabinet approved the
scheme in March, 1997. Due to several postponements by LANGEBERG in
submitting their proposal, the Privatisation Unit took a deliberate
step to advertise for sale of the enterprise in the “ECONOMIST” and
“BUSINESS DAY” and local newspapers in April, 1997. The only bid
received in June, 1997 was from LANGEBERG, who proposed an
amalgamation of the assets of their Ficksburg plant with those of
Basotho Canners (as opposed to acquiring strategic shareholding).
Negotiations were held in October, 1997. Cabinet approval was
delayed pending clarification of the implications of the negotiated
outcome, especially in relation to the production and marketing of
asparagus in Lesotho and the entry of canned products into the
European Union market.
Loti Brick
Loti Brick was one of
the first eight enterprises to be listed for privatisation in July,
1996. A Privatisation Scheme prepared by the Privatisation Unit in
consultation with the Ministry of Trade and Industry and the LNDC as
the major shareholder recommended the preservation of the enterprise
as a private company, with shares allocated to the management and
staff, local institutional investors and a strategic technical
investor. Thoughout this process all other shareholders of Loti
Brick (Lesotho National Development Bank with 23%, and Lesotho
Energy Enterprises with 4% equity) were kept in the picture. The
scheme was approved by Cabinet and invitations to tender published
in October, 1996. After several re-advertisements the Unit finally
received three non-responsive bids by January 24, 1997. Two of the
bids received were from COV1 and PROMAKARD, both of whom wished to
participate as institutional investors. A third bid from a South
African company based in the North West Province, WEENEN lent itself
more to a proposal for management of the enterpise without purchase
of equity. In the absence of any further proposals the evaluation
committee recommended in September, 1997 that the option of a
perfomance-based management contract be pursued with Weenen.
Negotiations were held with representatives of WEENEN in Maseru on
October, 1997. -A draft contract has been drafted and sent to WEENEN
for their comments in January, 1998. In the meantime KFW (Germany)
have reiterated that privatisation of Loti Brick was a condition for
their 1990 loan which financed the procurement of a kiln.
Maloti Oil
Maloti Oil is a Lesotho National Development Corporation which was
listed for privatisation in November, 1996. The shareholders in the
copany are LNDC with 65% , and the Lesotho Agricultural Bank with
35% equity respectively. The company was shut down due to poor
perfomance in July, 1996. The Privatisation Scheme for Maloti Oil
was prepared by the Privatisation Unit in consultation with the
Ministry of Agriculture, Co-operatives and Marketing as well as the
LNDC. The proposed ownership structure was a 70% stake for a
strategic investor with 30% of the shares reserved for employees and
Basotho investors. No bids were received in response to
advertisements placed in both Lesotho and South African newspapers
in October 9, 1997. The search for a strategic investor is being
pursued afresh in conjunction with the Investment Promotion Centre
of the Lesotho National Development Corporation, LNDC.
Lesotho Pharmaceutical Corporation
Privatisation Scheme was prepared by the Privatisation Unit in
consultation with the Ministry of Health and Social Welfare and the
LNDC. The Scheme recommended sale of majority shareholding to a
strategic investor with minority shares offered to institutional
investors and some shares reserved for employees. The scheme was
approved by Cabinet in August, 1997. The sale was advertised in
“CHEMISTRY AND INDUSTRY”, “BUSINESS DAY”, and local newspapers in
September, 1997. Two potential institutional investors, TRIPHARM
(LESOTHO) and TIME CONTROLLING INVESTMENTS (SA) submitted proposals
by the deadline of February 2,1998. Both proposals were conditional
on identification of a suitable strategic investor. The search for a
strategic partner continues, with the due date for submission of
proposals set at April 14, 1998.
Maluti Highlands Abattoir (Lesotho
National Abattoir and Feedlot Complex)
The Privatisation Scheme of this enterprise is in the course of
preparation by Privatisation Unit in consultation with the Ministry
of Agriculture Co-operatives and Marketing. An Investor search has
commenced early to identify possible levels of interest. In the
meantime the management contract by AACM International has been
extended by six months from February 1, 1998.
Marakabei Lodge
A Privatisation Scheme was prepared by the Privatisation Unit in
consultation with the Ministry of Tourism and Sports and was
approved by Cabinet in May 1997. Advertisements were placed in local
and international newspapers inviting prospective bidders to
participate in the privatisation. Despite numerous prior expressions
of interest, only two bids were submitted by the closing date of 18
July 1997. Both of these were found to be unresponsive to the
bidding guidelines and so the process was repeated for a second
time. The only bid received was again found to be inadequate. The
Evaluation Team advised that the lodge be re-advertised on the basis
of leasing the premises. Two bids were received by the closing date
of 21 November, 1997, one of which was found to be responsive.
Negotiations around a three year sub-lease agreement have been
completed and Cabinet approval is now awaited.
Quthing Lodge
A Privatisation Scheme was prepared by the Privatisation Unit in
consultation with the Ministry of Tourism and Sports. The scheme
recommended sale of the enterprise to a local investor. Cabinet
approved the proposal in June, 1997. Sale of the lodge was
advertised in local newspapers in July, 1997. No bid was received by
the deadline in August, 1997. The Unit subsequently sent letters to
a number of South African and local tourism establishment and tour
operators inviting them to submit bids to purchase or lease the
lodge. One bid to purchase was received from a local businessman in
January, 1998. Negotiations with the prospective buyer are pending.
International Freight and Travel
Services (IFTS)
The privatisation of this enterprise was handled as a fast track
transaction on the advice of the Private Sector Advisory Committee.
For purposes of inviting and evaluating bids the enterprise was
divided into its three lines of business, Travel Services, Car
Rental and Freight. An advertisement inviting bids from private
investors was placed in local and international newspapers in April,
1997. The Freight division attracted no interest at all. As it had
not been functional for the previous few years, the evaluation
committee recommended winding up the business. The Travel division
received one bid at the first round, but that was found to be
unresponsive to the criteria laid out in the bidding guidelines. On
the second round the bid received was again found unresponsive. The
future of the business now lies in the hands of Lesotho Bank who are
100% shareholders in the company. The Car Rental division, which
holds the franchise to trade as Avis in Lesotho did not attract any
bidders. However, AVIS (Southern Africa) had indicated their
interest in the business in 1996 and so were invited to submit a
proposal. Negotiations with AVIS (Southern Africa) were undertaken
for them to buy the business with 20 per cent shareholding reserved
for Basotho participation. Employees of AVIS (Lesotho) have all been
paid terminal benefits by Lesotho Bank, with AVIS (Southern Africa)
offering employment on new contracts to four of them. Heads of
agreement for the sale are due to be completed, with effective
takeover on April 1, 1998.
A Privatisation Scheme
was prepared by the Privatisation Unit in consultation with the
Ministry of Transport and Communications. The scheme recommended
that majority shareholding in the enterprise be sold to a strategic
investor. Minority shares would be reserved for local institutional
investors and offered to them when the profitability of the airline
stabilises. The scheme was approved by Cabinet in December, 1996.
Sale of the airline was advertised in the “Economist”, “Business
Day” and local newspapers in January 1997. The Unit also contacted
several airlines that had expressed an interest in LAC during an
investor search conducted in May, 1996. No bids were received on the
due date of March 15, but one potential investor, Rossair requested
an extension of three weeks to finalise their proposal. Further
extension was granted, placing the deadline at June 2, 1997. . Two
bids were received from South African airline operators, Rossair
Group and Bass Aviation. Both bidders proposed to buy the assets of
LAC. Following evaluation of the two bids Rossair was invited to
negotiations held in July, 1997. Cabinet approved sale on the basis
of the negotiated sale agreement which provides for a 20%
shareholding for local investors. The sale agreement provides for
the sale of assets for operation of the business (aircraft, spares
and equipment exclusive of equipment for servicing aircraft landing
etc.). It further excludes assets relating to landed properties
which remain under the ownership of Government. All the workers of
Lesotho Airways were paid terminal benefits.
The Privatisation Scheme
for this enterprise was prepared by the Privatisation Unit in close
consultation with the Ministry of Agriculture, Co-operatives and
Marketing following a major consultancy on the implications of grain
deregulation for the milling industry. The scheme recommended that
51% of the Government’s shareholding be sold to a strategic
investor, 10% reserved for employees, and the remaining 39% reserved
for future public floatation. Cabinet approved the scheme in May,
1997. Advertisements for the sale were place in the “ECONOMIST”,
“BUSINESS DAY”, and local newspapers in June, 1997. Three bid
proposals were received from SEABOARD (US); LESOTHO MILLING COMPANY;
AND FRASERS/EASTERN FREE STATE CO-OPERATIVES on August 15, 1997.
Following evaluation of the bids SEABOARD and LESOTHO MILLING
COMPANY were shortlisted and invited to perform due diligence in
order to finalise their proposals. The winning bidder, SEABOARD was
invited for negotiations which were held in October, 1997. Cabinet
approved the sale subject to including of the “Golden Share”
provisions to ensure protection of the vital national interests in
the company. The sale was duly approved in March, 1998.
Loti Brick was one of
the first eight enterprises to be listed for privatisation in July,
1996. A Privatisation Scheme prepared by the Privatisation Unit in
consultation with the Ministry of Trade and Industry and the LNDC as
the major shareholder recommended the preservation of the enterprise
as a private company, with shares allocated to the management and
staff, local institutional investors and a strategic technical
investor. Thoughout this process all other shareholders of Loti
Brick (Lesotho National Development Bank with 23%, and Lesotho
Energy Enterprises with 4% equity) were kept in the picture. The
scheme was approved by Cabinet and invitations to tender published
in October, 1996. After several re-advertisements the Unit finally
received three non-responsive bids by January 24, 1997. Two of the
bids received were from COV1 and PROMAKARD, both of whom wished to
participate as institutional investors. A third bid from a South
African company based in the North West Province, WEENEN lent itself
more to a proposal for management of the enterpise without purchase
of equity. In the absence of any further proposals the evaluation
committee recommended in September, 1997 that the option of a
perfomance-based management contract be pursued with Weenen.
Negotiations were held with representatives of WEENEN in Maseru on
October, 1997. -A draft contract has been drafted and sent to WEENEN
for their comments in January, 1998. In the meantime KFW (Germany)
have reiterated that privatisation of Loti Brick was a condition for
their 1990 loan which financed the procurement of a kiln.
Privatisation Scheme was prepared by the Privatisation Unit in
consultation with the Ministry of Health and Social Welfare and the
LNDC. The Scheme recommended sale of majority shareholding to a
strategic investor with minority shares offered to institutional
investors and some shares reserved for employees. The scheme was
approved by Cabinet in August, 1997. The sale was advertised in
“CHEMISTRY AND INDUSTRY”, “BUSINESS DAY”, and local newspapers in
September, 1997. Two potential institutional investors, TRIPHARM
(LESOTHO) and TIME CONTROLLING INVESTMENTS (SA) submitted proposals
by the deadline of February 2,1998. Both proposals were conditional
on identification of a suitable strategic investor. The search for a
strategic partner continues, with the due date for submission of
proposals set at April 14, 1998.
The Privatisation Scheme of this enterprise is in the course of
preparation by Privatisation Unit in consultation with the Ministry
of Agriculture Co-operatives and Marketing. An Investor search has
commenced early to identify possible levels of interest. In the
meantime the management contract by AACM International has been
extended by six months from February 1, 1998.