Categories: Stories

Who is really bailing out Econet Zimbabwe?

Results of the $130 million Econet Wireless Zimbabwe Rights issue which opened on 20 February will only be known next week but the securities will be listed tomorrow.

The results of the rights offer will be published next Monday, 27 March but payments should be cleared by Wednesday, 22March.

The offer was underwritten by Econet Global raising questions as to whether this was not another way for Econet founder Strive Masiyiwa to increase his stake in the company.

Econet Global is registered in Mauritius, a tax haven.

Although guaranteeing the rights offer Econet Global has been charging the Zimbabwean company 6 percent for guaranteeing the loans the company obtained from the China Development Bank, Ericsson, African Export and Import Bank and the Industrial Development Bank.

The mobile telecommunications company obtained loans totaling $326.6 million from the four financiers but now has $128.2 million outstanding.

What has also raised eyebrows is that only $13.2 million of this is required by 12 April while the bulk of the amount, $75 million, should be paid by 21 August 2019.

According to calculations done for The Insider Econet Zimbabwe could have paid as much as $85.6 million in guarantee fees to Econet Global.

The calculations showed that the least amount it could have paid is $48.5 million.

(276 VIEWS)

This post was last modified on %s = human-readable time difference 8:40 am

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.

Recent Posts

To go or not to go- Mnangagwa in a quandary

Zimbabwe President Emmerson Mnangagwa has repeatedly stated that he is not going to contest a…

November 25, 2024

ZiG loses steam, falls against US dollar for five consecutive days

The Zimbabwe Gold fell against the United States dollar for five consecutive days from Monday…

November 22, 2024

Indian think tank says Starlink is a wolf in sheep’s clothing

An Indian think tank has described Starlink, a satellite internet service provider which recently entered…

November 18, 2024

ZiG firms against US dollar for 10 days running but people still do not have confidence in the currency

Zimbabwe’s new currency, the Zimbabwe Gold (ZiG), firmed against the United States dollars for 10…

November 16, 2024

Zimbabwe among the top countries with the widest gap between the rich and poor

Zimbabwe is among the top 30 countries in the world with the widest gap between…

November 14, 2024

Can the ZiG sustain its rally against the US dollar?

Zimbabwe’s battered currency, the Zimbabwe Gold, which was under attack until the central bank devalued…

November 10, 2024