By Kudzaishe Chimonera
The chief executive of Mutapa Investment Fund, John Mangudya says the value of the fund’s 35% stake in Kuvimba Mining House is projected to increase significantly over the next decade.
Mangudya clarified that the widely cited US$1.9 billion figure linked to the transaction does not represent the current valuation but rather the future value of treasury bills issued to finance the acquisition.
He said the figure had been verified in an audit report.
“US$1.9 billion was indeed reissued as treasury bills to Mutapa for the purchase of 35% in Kuvimba… the amount US$1.9 is a future value in ten years’ time,” he said.
According to the audit, the present value of the transaction is considerably lower estimated at around US$1.1 billion due to the time-based structure of the payment.
“The current value… of that US$1.9 is 1.1 billion,” Mangudya said.
The treasury bills underpinning the deal are structured over a ten-year period including a five-year grace phase and an annual interest rate of 5%.
Mangudya said the fund intends to generate revenue during this period to meet its financial obligations to the government.
“It means during the course of the business of Mutapa, we are going to raise money… to ensure that the money is paid to government so that there is no loss of value,” he said.
Despite the lower present valuation, he maintained that the asset had already appreciated.
“In fact, that asset has grown up significantly,” he said.
The Mutapa Investment Fund was established to manage state-owned assets and drive long-term national investment with the Kuvimba stake seen as one of its key holdings.
