Econet Wireless Zimbabwe will pay more than US$24 million in cash to investors who opted to exit the telecoms group ahead of its planned delisting from the Zimbabwe Stock Exchange, marking a key step in the company’s restructuring exercise.Investment in Zimbabwe
Zimbabwe’s largest mobile network operator said investors tendered 143,2 million shares under the exit offer that closed on March 9, representing 4,8 percent of the company’s issued share capital.
Under the terms of the offer, exiting shareholders will receive US$0,17 in cash and one share in Econet InfraCo, the infrastructure business the group plans to list on the Victoria Falls Stock Exchange (VFEX) later this month.
In total, the company will pay US$24,34 million in cash and issue 143,2 million Econet InfraCo shares valued at about US$47,25 million, according to a statement released by group company secretary Tatenda Ngowe.
“The exit offer consideration shall comprise US$0,17 in cash and one Econet InfraCo share for every EWZL share tendered,” Ms Ngowe said. “Accordingly, the company will pay an aggregate cash consideration of US$24 340 666 and allot 143 180 386 Econet InfraCo shares to participating shareholders.”
The shares tendered under the offer will be cancelled once settlement is complete, the company said, resulting in a pro rata increase in the shareholding of remaining investors.
The exit payment forms part of a broader restructuring that will see Econet Wireless Zimbabwe voluntarily delist from the ZSE, a move approved by shareholders at an extraordinary general meeting earlier this year.
The telecoms group has argued that the restructuring will unlock value by separating its infrastructure assets, including towers and fibre networks, into a dedicated business.
Econet InfraCo is expected to list on the Victoria Falls Stock Exchange on March 31, subject to regulatory approvals and exchange control clearance for foreign shareholders.
Ahead of the listing, Econet InfraCo will issue additional shares valued at US$940 million, leaving the telecoms operator with 95,2 percent ownership of the infrastructure company.
Investors who participated in the exit offer will collectively hold the remaining 4,8 percent stake. Ms Ngowe said the company had already instructed transfer secretaries to begin processing payments.
“The transfer secretaries have been instructed to commence processing and payment of the cash consideration,” she said.
However, payments to foreign investors will require exchange control approvals and those shareholders must appoint local banks to receive settlement before funds are remitted abroad.
The spin-off is designed to create a pure infrastructure investment vehicle, a model widely used by telecoms operators globally to unlock capital tied up in tower and network assets.
Through listing InfraCo on the US dollar-denominated VFEX, Econet is expected to attract international investors seeking exposure to infrastructure assets while insulating the business from Zimbabwe’s currency volatility.Investment in Zimbabwe
Market analysts say the move could also improve the telecoms group’s balance sheet by allowing infrastructure assets to raise funding independently.
The restructuring mirrors similar transactions by telecoms groups across emerging markets, where tower companies have been separated to allow infrastructure to be financed and valued independently from mobile operations.
As part of the restructuring process, Econet has also announced a cash dividend for shareholders who did not participate in the exit offer.
Investors who remained in the company will trade cum-dividend until March 18, with the shares turning ex-dividend on March 19. The record date is March 20, while payments are expected around March 25.
Ms Ngowe said the company may also issue a dividend in specie, potentially involving InfraCo shares, to ensure the infrastructure company meets the free float requirements of the VFEX ahead of its listing.
“The company anticipates that it will have to issue a dividend in specie to its remaining shareholders to enable Econet InfraCo to meet the free float requirements of the VFEX,” she said.
Further details will be announced once the company receives regulatory approval, she added. The separation of Econet’s infrastructure business marks one of the most significant corporate restructurings in Zimbabwe’s telecoms sector in recent years.
If completed as planned, the VFEX listing will create one of the largest infrastructure-focused companies on the offshore exchange, potentially giving investors a new way to participate in Zimbabwe’s expanding digital economy while keeping transactions in US dollars.-herald
