ECONET Wireless Group has announced plans to seek a listing on the London Stock Exchange (LSE) through an initial public offer that the company estimates will raise between US$400 million
and US$500 million.
If the transaction is successfully completed, it could see the Johannesburg-based group being registered on the LSE by the second quarter of next year.
Econet group chief executive Strive Masiyiwa this week confirmed the plans, saying the group is confident of success because of the immense interest in Econet, which operates in Africa, the UK and the East Asia and Pacific area.
“There is tremendous interest in our company and we have decided to go for public equity as opposed to private equity funding because there many investors who want to participate in the growth of our company,” Masiyiwa said. “In addition, there is also renewed interest in telecommunications business in Africa in general.
“We have therefore decided to seek a listing in the United Kingdom to raise funds to retire debt and also expand our existing operations spread across several continents. The amount to be raised however excludes funding that we need to acquire additional shares in Vee Mobile in Nigeria when we have resolved the current shareholder issue.”
Econet is entangled in a dispute with Vodacom Nigeria.
The dispute arose last year when Econet Wireless Group, a founding partner and 5%-shareholder in Econet Wireless Nigeria (EWN), fought a bid by South Africa’s Vodacom to take over EWN claiming pre-emptive rights to raise equity stake.
During the same month, Vodacom’s top three executives resigned on allegations of improper actions in the payment of fees to brokers.
However, Vodacom has over the past 16 months stated that it pulled out of Nigeria because of lack of corporate governance and lack of control over the firm.
The case is now before the Paris-based International Court of Arbitration.
In June last year, the EWN/Vodacom dispute took another twist when the South African mobile giant cancelled its management contract due to staff problems over corporate governance.
If Econet successfully lists in London, the Harare-formed group would join another Zimbabwean counter, NMB Bank, on the LSE.
Masiyiwa said financial advisors have already been appointed to work on the proposed listing and he is confident this will be achieved by May next year if everything goes according to plan.
“It could be later but our original target right now is around May next year,” he said.
Masiyiwa said the UK had less stringent foreign exchange regulations compared to South Africa where the group had originally considered to list.
He also said Econet is about to finalise at least two significant acquisitions in the telecommunications sector and he expects an announcement to be made before the end of the year.
“Naturally for strategic and competitive reasons we can’t say more at present,” Masiyiwa said.
Meanwhile, Masiyiwa announced that Econet will early next year start building a new 3G mobile network in New Zealand and said supplier contracts are being finalised and should be signed before the end of this year.