Treasury’s delay to divest or reduce its shareholding in Sunbird Tourism plc took centre stage at the listed hotel chain’s 30th Annual General Meeting (AGM) in Blantyre on Friday.
The Malawi government has 71 percent stake in the Malawi Stock Exchange (MSE)-listed Sunbird plc with 12.56 percent owned by the public, 10 percent by dual-listed conglomerate Press Corporation Limited (PCL) and 6.44 percent by United Kingdom (UK)-based investor Noel Hayes.
The 10 percent stake by PCL was bought from Hayes earlier this year, who had 16.44 percent shareholding in the hotel chain.
Speaking during the AGM, one of the minority shareholders Joe Maere said government’s delay to divest or reduce its stake in Sunbird is a huge cost to the company.
“Government is holding Malawians at ransom. Time in a business is a cost. It is either government divests or reduce its shareholding so that Sunbird raises capital for its infrastructural projects,” he said.
But in an interview, Sunbird Tourism plc board chairperson Phillip Madinga said discussions they have been having with government are positive, adding it is just a matter of time.
He said the 71 percent that government has could raise K20 billion which could be used in the provision of social services.
“We are close to having a deal. The discussions we are having with the Ministry of Finance and Ministry of Industry, Trade and Tourism, which is our parent ministry, will bear results,” he said.
Secretary to the Treasury Ben Botolo, who is one of the directors of Sunbird Tourism plc, said government has been mulling over diluting its presence in Sunbird.
“That is the right direction but what we want is that whenever we dilute [shareholding], it has to benefit Malawians not benefiting multinationals.
“It is our desire that big conglomerates should go into the green fields so that they can start their own investments rather than just buying or taking over some of the already developed investments,” he said, adding that allowing conglomerates to take over Sunbird could create a monopoly which is not good for business.
In the year under review, Sunbird profit after-tax increased by 82 percent to K2.4 billion from K1.3 billion, which is attributed to revenue growth, prudent cost management, business process re-engineering and improved economic environment.
The group’s finance costs also reduced to K592 million from the previous year’s K682 million due to repayment of loans and the reduction in interest rates.