Telecel Zimbabwe, the country’s smallest mobile telecommunications company, has initiated voluntary corporate rescue proceedings following a prior unsuccessful attempt by its workers to place the firm under corporate rescue in 2022.
The resolution, filed with the Master of the High Court and Registrar of Companies, initiates a formal process under Section 122 of the Insolvency Act, aimed at reviving the struggling company, its board said in a statement.
The corporate rescue mechanism provides a legal framework for a financially distressed company to undergo a supervised process designed to restore its financial health and operational viability.
According to the Insolvency Act, Section 122, a company’s board can resolve to begin this process and place the company under supervision if they have reasonable grounds to believe the company is financially distressed and there is a reasonable prospect of rescuing the company.
“The corporate rescue process is designed to rehabilitate the company and does not signify any intention to liquidate,” said Telecel.
Telecel’s subscriber base decreased by five percent to 336 559 during the second quarter of 2025, according to the Postal and Telecommunications Sector Performance Report for the second quarter of 2025 by Potraz.
The performance contrasts sharply with its competitors, Econet and NetOne, which both recorded subscriber growth. As a result, Telecel’s market share declined by 0,13 percentage points over the same period.
In October 2022, the Communications and Allied Workers union (Cawuz) applied to the High Court to place the company under corporate rescue in an attempt to save the telecommunications firm from collapse.
Cawuz, which represents Telecel workers and was itself a creditor at that time due to significant arrears in both unpaid salaries and union subscriptions, submitted that the company was demonstrably in financial distress.
The union contended that Telecel had failed to service its debts and that its liabilities exceeded its assets, a clear sign of insolvency. The application argued Telecel had been on the brink for a long time.
Despite the dire financial state, Cawuz maintained that Telecel’s woes were “not insurmountable.”
The union pointed to the success of competitors and the vast, “inexhaustible” business opportunities within the sector as proof that the company still holds “realistic prospects of recovery.”
To capitalise on this potential, Cawuz proposed that a corporate rescue practitioner be appointed to supervise the company and formulate a turnaround plan, arguing this was the only way to avert liquidation.
Telecel, however, opposed the application. The company challenged the union’s right to bring the matter before the court, disputing Cawuz’s legal standing. Telecel argued that the union was not an “affected person” as defined by the law, seeking to have the application dismissed on technical grounds before the merits of the financial distress could be fully debated.
Meanwhile, Tsebo Zimbabwe (Private) Limited is set to convene a meeting with its creditors and other affected persons to consider and vote on a proposed corporate rescue plan.
The proposed plan was developed by the appointed Corporate Rescue Practitioner, Mr Clyton Kazembe of AMG Global Chartered Accountants (Zimbabwe), as part of ongoing efforts to revive the operations of the compan
“All Creditors and Affected Persons are hereby informed that the Corporate Rescue Practitioner has developed a Corporate Rescue Plan (‘Plan’) for the above-mentioned company and calls upon the Creditors and Affected Persons who have had their claims proven and accepted to attend the meeting to consider and vote for the Plan,” reads part of the notice.
“The aforementioned corporate rescue plan was prepared after consulting creditors, other affected persons, and management of the company in terms of Section 142(1) of the Act.
“A copy of the Plan has been circulated and shared with the Creditors and Affected Persons.
“The meeting, which shall be convened in terms of Section 143 of the Act, shall be to present the plan to the Creditors and Affected Persons and afford them an opportunity to make representations regarding the proposed plan and to vote on the proposed plan,” added the notice.
The meeting is scheduled to take place on November 4 in Harare.-herald
