TELECEL ZIMBABWE’s chances of exiting corporate rescue now rest squarely on its ability to secure an investor willing to shoulder a substantial debt burden while injecting fresh capital to revive operations, corporate rescue practitioner Mr Kundai Tibugare of Grant Thornton has said.
Last week, the rescue practitioner issued an invitation tender to interested parties to invest in Telecel Zimbabwe.
At the centre of the process is a US$240 million creditor exposure that any prospective investor would need to address as part of a broader turnaround plan.
In an interview, Mr Tibugare indicated that the structure of the deal would ultimately be determined by what bidders were prepared to commit, both in settling liabilities and restoring the business to competitiveness.
“Prospective investors are required to indicate the level of financial commitment towards creditor settlement and the scale of capital injection envisaged to revive and sustainably reposition the business,” Mr Tibugare said.
He explained that there was no predetermined valuation guiding the transaction, with the rescue process instead relying on negotiations between investors and creditors.
This approach places significant weight on consensus, as any proposal would need to satisfy both parties before implementation.
“It means the investor has to agree with the creditors and then propose what they are willing to pay them,” he said.
Telecel entered corporate rescue in October 2025 under provisions of the Insolvency Act (Zimbabwe) after its board concluded that the business was financially distressed, but still recoverable.
The process provides temporary protection from creditor action while a restructuring strategy is pursued.
Mr Tibugare said the company’s operational decline had been driven largely by years of underinvestment, which has left its infrastructure outdated and unable to compete effectively in a fast-evolving telecommunications market.
“Limited capital injections over time have constrained infrastructure renewal, leading to obsolescence in key network components,” he said.
“Meaningful participation in a competitive telecommunications market will necessitate significant investment in modern, industry-standard equipment.”
Mr Tibugare estimated that depending on the scale and appetite of any would-be investor, at least US$50 million would be required as an immediate baseline capital injection to modernise the network, improve service quality and restore competitiveness.
This funding will go towards upgrading equipment and expanding capacity — areas where Telecel has fallen behind its larger rivals.
The company’s weakened position is reflected in its shrinking market share.
Data from the Postal and Telecommunications Regulatory Authority of Zimbabwe showed that Telecel’s active subscriptions had dropped to just over 319 000 by the third quarter of 2025, leaving it with less than 2 percent of the market.
By contrast, Econet Wireless Zimbabwe controlled about 73 percent, while NetOne held roughly a quarter.
The disparity highlights the scale of Telecel’s decline from what was once a competitive third player into a marginal operator.
Usage patterns have mirrored this erosion.
Voice traffic and data consumption have both declined sharply, while capital expenditure has stalled.
The operator has not expanded its long-term evolution (LTE) footprint and remains without 5G capability, further widening the gap with competitors in a market increasingly driven by high-speed data services.
Against this backdrop, Mr Tibugare said interest from potential investors has been building ahead of the formal bidding process, following earlier engagements and road shows aimed at gauging appetite.
“Yes, we have been talking to other suitors before, and there were people who were interested in the business. What we are now doing is ensuring that everyone has a fair opportunity to evaluate the company,” he said.
The formal process was designed to enhance transparency and attract a broader pool of bidders.
Interested parties are required to register by April 28, 2026, after which they will be granted access to detailed information under non-disclosure agreements.
“A five-week due diligence period is set to follow, culminating in the submission of final bids by 15 June,” said Mr Tibugare. “Adjudication is expected to take place within a week following the deadline date, before proposals are presented to creditors for consideration in early July.”
Mr Tibugare stressed that the outcome will hinge on whether bidders can craft proposals that balance creditor expectations with the need for meaningful reinvestment in the business.
“The bidders have to present something they believe is suitable, and the creditors also have to agree,” he said.
Beyond its core telecommunications business, Telecel still retains assets that could support a recovery strategy, including its mobile money platform — Telecash.
However, without a significant capital injection and debt resolution, the company would struggle to regain relevance in a highly concentrated market.
The investor process, therefore, represents a decisive moment.
A successful deal could see Telecel re-emerge as a viable third operator, while failure to secure adequate funding risks prolonging its decline in Zimbabwe’s competitive telecommunications sector.-herald
