TELECOMMUNICATIONS giant, Econet Wireless Zimbabwe (Econet) has dangled a premium exit offer for shareholders ahead of its planned US$1 billion Econet InfraCo listing, offering an indivisible US$0,50 per share as it prepares to delist from the Zimbabwe Stock Exchange (ZSE).
The planned ZSE exit will be followed by the listing of Econet InfraCo (Econet Infrastructure Company Limited), housing all of Econet’s real estate, tower and power assets.
In terms of shareholder value, Econet InfraCo’s valuation is anchored by long-term, US dollar lease agreements with Econet, providing predictable and stable cash flows, with infrastructure expansion only affecting the share price if it increases sustainable earnings.
Hence, any future infrastructure expansion plans will only further enhance value if they deliver sustainable, dollar-based cash flows.
Econet InfraCo’s listing will occur on the Victoria Falls Stock Exchange (VFEX) on March 31, next month, the same day Econet delists from the ZSE.
The higher-premium offer comes as Econet’s shares traded at ZiG7,7358 on Tuesday, about US$0,30, with exiting investors set to receive a total US$0,50 per share, comprising US$0,17 in cash and US$0,33 in Econet InfraCo shares.
“The exit offer is made available only to shareholders who elect to exit and is conditional on the approval of the voluntary delisting of Econet from the ZSE,” Econet said in a circular to shareholders on the proposed corporate restructuring.
“The exit offer provides eligible shareholders with a choice to dispose all or part of their Econet shares for an indivisible consideration of US$0,50 per share, comprising: US$0,17 per share in cash; and US$0,33 per share through the issuance of Econet InfraCo shares, based on the independently determined valuation as described in this circular.”
Econet said shareholders may accept the exit offer in respect of all or part of their Econet shares.
“Shareholders who do not accept the exit offer will remain invested in Econet following its voluntary delisting,” the mobile network operator continued.
Basically, Econet will continue operating as an unlisted public company after delisting from the ZSE, while its infrastructure arm, Econet InfraCo — which holds the group’s real estate, tower, and power assets — will be separately listed on the VFEX.
This means shareholders who do not exit will retain shares in an unlisted entity.
“The VFEX listing framework, with its USD-denominated trading environment and focus on asset-backed and infrastructure-oriented issuers, is considered more appropriate for Econet InfraCo’s business model,” Econet said.
“Applying relevant valuation methodologies and valuation benchmarks to Econet InfraCo’s estimated profitability and earnings, with an implied current EBITDA [Earnings Before Interest, Taxes, Depreciation, and Amortisation] of approximately US$50 million indicates an enterprise value of approximately US$1 billion, which translates to an implied value of approximately US$0,33 per Econet InfraCo share, based on 2 992 163 203 shares in issue.”
The Econet board considers the VFEX to be a more suitable platform for the market to recognise and appropriately price these infrastructure-style valuation characteristics relative to the ZSE.
“The exit offer represents a significant premium to recent historical trading prices of Econet shares on the ZSE, ranging from approximately 138% to 428%, depending on the reference date selected between January 2, 2025 — December 2, 2025,” Econet said.
“Following the voluntary delisting, Econet will remain a public company and will continue to operate in accordance with applicable laws and good corporate governance practices.”
Econet’s board will continue to consider dividends from time to time.
“General meetings will continue to be convened, audited financial statements will continue to be prepared and published annually, and ongoing shareholder communication will be maintained through the company secretary,” Econet said.
The opening date of the exit offer is February 27 and will close next month on March 9.
Econet’s planned delisting is because of the firm wanting to address what it called a “grossly undervalued” stock.
Thus, Econet’s ZSE exit sets a clearer valuation benchmark, avoiding a costly full cash buyout, and repositions its infrastructure assets on a US-dollar platform better suited to long-term capital raising and value recognition. -newsda
