ECONET Wireless Zimbabwe’s spin-off Cassava Smartech Zimbabwe Limited (CSZL) will finally list on the Zimbabwe Stock Exchange (ZSE) on Tuesday after the Strive Masiyiwa-owned telecommunications giant complied with the bourse’s regulations on allocation of shares.
BY TATIRA ZWINOIRA
Econet (EWZL) last month announced that it was unbundling its technology, financial and insurance segment, which contributes about 39% of its total revenue, into the newly formed CSZL to allow the group to focus on growing digital service opportunities in Zimbabwe.
The company made an offer to its shareholders to convert
1 166 906 618 debentures into new ordinary shares subject to shareholder and regulatory approval.
The move was meant to increase Econet’s equity to cater for unbundling CSZL away from the main business, raise capital and deal with its debt obligations.
However, minority shareholders raised concerns around the process, leading to delays in the listing.
On Friday Econet said it had decided to transfer 50% of the debentures into CSZL in the meantime, paving way for this week’s debut on the ZSE.
The shares will have a nominal value of 4.665 US cents per debenture and a coupon rate of 5% per annum and are redeemable on May 3, 2023.
“Consequently, 2 590 577 241 issued ordinary shares in Cassava Smartech Zimbabwe Limited will be listed by way of introduction on the Zimbabwe Stock Exchange on Tuesday the 18th of December 2018,” Econet group company secretary Charles Banda said in a statement.
Banda said the split in shares between EWZL and CSZL became necessary because the debenture conversion was yet to be done.
“As a result of the demerger, 583 453 309 debentures being 50% of 1 166 906 618 debentures in issue in EWZL will be transferred to CSZL, with the balance remaining in EWZL,” he said.
“The split of the debentures between EWZL and CSZL has been necessitated by the fact that debenture conversion has not yet taken place.”
The conversion of the debentures should have been completed a week ago, according to a schedule released month.
CSZL is the holding company for EcoCash, Steward Bank, Econet Life Private Limited and Econet Insurance Private Limited. Save for Econet Life, among others.
The Econet offshoot’s recorded assets were worth $657, 12 million as at the end of the financial year ended February 28, 2018.
The company has grown its gross revenue annually at an average rate of 57, 77% since 2014 to $257, 75 million during the period under review.
CSZL raised its net income to $70, 72 million as at the end of February 28, 2018 from a 2017 comparative of $18, 73 million and a loss-making position of $29, 16 million in 2014.