By MAIMBOLWA MULIKELELA –
THE Industrial Development Corporation (IDC) is in the process of improving Times Printpak Zambia Limited’s financial resource base to enable the company become profitable.
IDC chief executive officer Andrew Chipwende expressed commitment to improve the Times Printpak capital base and make it viable.
Mr Chipwende said the Times Printpak Zambia Limited, the publishers of the Times of Zambia and Sunday Times of Zambia could be turned around and be a different company.
“Times Printpak Zambia Limited is a company that can be turned around, from the discussions we had with management… if we back and support the business plan, management are proposing, it can be a different company,” he said.
Mr Chipwende said in an interview that the IDC as a shareholder of the company would intervene in the areas of financing and ensure that the firm was made viable.
Mr Chipwende said there were two primary sources of funding that would be given to entities, one would be in the form of capital from IDC the shareholders and this would essentially form part of the capital injection for the company.
He said when this was done, the company had to make a profit and declare dividends to the IDC.
Mr Chipwende said the second funding would be in the form of debt to be obtained from the market with the support of the IDC.
“And what do the lenders expect from the company after you have accessed your loan? They expect you to service your debt obligation by ensuring that your operations are viable, because if they are not viable, it means the lender will take over the business by closing it down, hence it is important to service your loan obligation.
“Those two factors are in themselves an incentive for management to perform, because firstly, you know that you must make a profit, service your debt obligations and must pay dividends to shareholders,” he said.
He said IDC took ownership of the 34 State Owned Enterprises (SOEs) including the Times Printpak, saying that these institutions needed restructuring and financing.
The IDC served as an investment holding company for the SOEs and new investments that ultimately generated earnings for the proposed Zambia Sovereign Wealth Fund.