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Masiyiwa Pumps $100 Million In Econet Rights Issue

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Masiyiwa Pumps $100 Million In Econet Rights Issue

ECONET Wireless Zimbabwe early this year planned to raise $130 million via a debatable rights offer and linked debentures in order to service its foreign debt. Under the rights offer, shareholders were to follow their rights by paying the subscription price of the shares and linked debentures into the company’s debt account.

When a company takes treasury or unissued shares and offers them to existing shareholders in proportion to existing levels of shareholding for shareholders to buy; we call that a rights offer.

Econet was offering 1,082,088,944 ordinary shares plus 263 050 614 class A shares at a subscription price of 5 cents for about 82 ordinary shares for every 100 ordinary shares already held in the group.

Econet Wireless Zimbabwe’s $130 million rights issue was undersubscribed by over 75 percent, with the underwriter pumping in $100 million.

With the $100 million, Econet Wireless Global has significantly raised its shareholding in Zimbabwe’s largest communications network, from its current shareholding of 30.02 percent.

Econet Global could not afford to put its destiny in the hands of an independent underwriter or a process of re-allocating mopped up shares it could not control.

Econet chief executive, Douglas Mboweni said the company was on track to raise the full $130 million.

“We will release the full details probably next week, but we are on course to pay off all our foreign loans in April,” said Mboweni.

“We have not defaulted on our loans, and our shareholders have now ensured that we will not default in future.”

According to the Source, the Masiyiwa-owned anchor shareholder in Econet Wireless Zimbabwe, will be the biggest beneficiary, buying up the largest chunk of the shares on offer.

Econet Wireless Zimbabwe owes a consortium of creditors China Development Bank, African Export Import Bank, Ericsson and South Africa’s Industrial Development Corporation  just over $128 million.

Pardon has been a technology enthusiast his entire life and has spent the better part of last decades in information technology and security, and he writes with an aim to remove some of the "mysticism" from the cyber world. He’s the Editor at Techunzipped. Away from the keyboard, you're likely to find him playing with the latest gadgets or the latest Game.

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