THE Competition and Tariffs Commission (CTC) has launched a probe into the acquisition of PetroZim’s 50% stake by the National Oil infrastructure Company of Zimbabwe (Noic), NewsDay has established.
BY FIDELITY MHLANGA/TINOTENDA MUNYUKWI
In an interview with NewsDay last week, CTC assistant director Benjamin Chinhengo confirmed the ongoing probe, but declined to give further details.
“We are in the process of assessing the deal at the moment. There is no information that we can give out yet because we are still doing the assessment,” he said.
Noic and South African firm Lonmin now own 50% apiece in Petrozim.
Last month, Lonmin announced that it had “entered into a conditional sale of shares agreement to sell its 50% interest in Petrozim Line (Private) Limited for a gross cash consideration of $14,75 million to the government’s oil infrastructure company.
According to impeccable sources, consultations have since commenced and are envisaged to be concluded before year end.
“CTC has started the consultations with various key stakeholders, such as Zimbabwe Energy Regulatory Authority and fuel retailers, with a view to complete looking into the transactions within a few months to come. At law, this should be done in less than 90 days, but an additional 30 is allowable if the case had challenges beyond control. At the moment, competition case officers are doing the analysis before handing it to supervisors for further scrutiny,” a source said.
Over and above the $14,75 million, Lonmin will receive $8 million in the form of special dividends from Petrozim.
Lonmin, which has mining footprints in South Africa, said the transaction was done to enhance its liquidity.
‘’The transaction forms part of Lonmin’s ongoing programme to dispose non-core assets. The purchase price and special dividends will be paid in cash on completion of the transaction and will be used to improve the company’s liquidity,” Lonmin said.
Petrozim owns and operates the Feruka to Harare fuel pipeline and currently holds the sole and exclusive right to transport all petroleum products imported into Zimbabwe through the pipeline.
The pipeline, built in 1966, runs between Beira in Mozambique and Harare carrying 6,5 million litres of fuel per day, but it has a maximum capacity of eight million litres per day.
The government introduced a 4 cents per litre levy on fuel importers using road transport to bring fuel into the country in an effort to induce them to use the Beira-Feruka pipeline.
The pipeline currently accounts for at least 90% of the fuel that comes into country with the remainder ferried by road.
Noic has depots in Bulawayo, Mutare, Beitbridge and Harare.
Noic has blending facilities at its depots and undertakes blending services on behalf of its clients as well as the pipeline transportation of petroleum liquids such as diesel, petrol, jet A1 and illuminating paraffin.
In 2015, Noic spent $12 million in constructing the Mabvuku fuel loading gantry in partnership with Sakunda Energy.
The Mabvuku facility can simultaneously load eight trucks and caters for both the domestic and export markets.