What is Zimbabwe’s richest man up to?


0

There are a lot of unanswered questions since the country’s largest mobile telephone network, Econet Wireless Zimbabwe, announced a $130 million rights offer on 17 January.

First, reports said the offer had not been cleared by the Zimbabwe Stock Exchange Listings Committee and ZSE chairperson Caroline Sandura was notified about this.

ZSE chief executive officer Alban Chirume was reported to have bulldozed his way resulting in the circular about the offer being circulated.

There has been dead silence on whether the offer was sanctioned by the Listings Committee after that.

Second, those who want to buy shares under the rights offer are required to pay for the shares through Standard Chartered Bank in London, which means they should have foreign currency that can be transferred.

This decision, though meant to facilitate the payment of foreign loans raises a lot more questions, especially when one considers that the underwriter is Econet Wireless Global?

The move automatically shuts out local investors with no access to foreign currency raising the question, does Econet really want to pay off its debt or its major shareholders simply want to squeeze out local minority shareholders who will obviously have no access to foreign currency?

This raises another question, how will the founder of Econet, Strive Masiyiwa, who is one of the major shareholders, personally benefit from the offer?

How big are Econet’s debts?

Is the rights offer going to clear all of them?

Is Econet under pressure from its creditors to pay off the debts because normally a rights offer is used to raise funds for expansion. Indeed it can be used to raise funds to pay off debts but this is usually when a company is threatened with foreclosure or is facing cashflow problems?

Besides, a rights offer, dilutes the shareholding of the minority shareholders, so could this be one of the major aims?

Over the next few days, with your help as our readers and insiders, we want to explore why Econet has come up with this offer and why, we believe, it wants to squeeze out minority shareholders.

If you have any suggestions or information that can help us, please send them to: [email protected].

All submissions will be treated in the strictest confidence.

(426 VIEWS)


Like it? Share with your friends!

0
Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

0 Comments

Your email address will not be published. Required fields are marked *