Econet Rights Offer Media Release

By Published On: February 2nd, 2017Categories: Corporate announcement


This press release is in response to a Notice issued by the Zimbabwe Stock Exchange (ZSE) Board of Directors in which they advised the Investing Public that they had advised Econet Wireless Zimbabwe Limited to postpone its Extraordinary General Meeting (EGM) scheduled for 3 February 2017.

The ZSE Board has no jurisdiction to deal with the approval of Rights Offer Circulars or the listing of securities on the Zimbabwe Stock Exchange. The ZSE Notice was signed on behalf of the ZSE Board by the Zimbabwe Stock Exchange Board Chairman, who incidentally is the Company Secretary to Tel One, one of our competitors. The ZSE Notice comes a day before our EGM. We consider this to be extremely disruptive and an infringement of the rights of the Company and its shareholders. We have also noted with concern that all deliberations of the ZSE Board were leaked to the press in breach of the provisions of the Listing Requirements that regulate the release of share price sensitive information. At times we have become aware of meetings and decisions of the ZSE Board through the media prior to any formal communication from the ZSE.

The ZSE Board has no Jurisdiction over the publication of Circulars to members.

The decision to advise Econet to postpone the EGM of members was taken by the ZSE Board. The Notice on the postponement of the EGM was also published by the ZSE Board. The ZSE Board has no jurisdiction whatsoever on matters relating to listed Companies and their Circulars to members. The powers to regulate listed securities are vested in the Committee of the ZSE that is usually referred to as the Listing Committee. This is specifically provided for on page SELR-0-v of the Listing Requirements which specifically states that the Committee of the ZSE “is the competent authority responsible for the list of the securities which may be dealt in on the ZSE, applications by the issuers of securities for the inclusion of securities thereto and the annual revision of the list.” The entire listing requirements do not mention, or refer to the Board of the ZSE as having any powers at all in relation to listed securities. Therefore, the Company decided to ignore the invalid and disruptive communication from the Board of the ZSE that was communicated to us through the Company Secretary of one of our competitors who clearly did not recuse herself on matters relating to Econet.

Approval by the ZSE Listings Committee

The Competent Authority established under the ZSE Listing Requirements is the Committee of the Zimbabwe Stock Exchange. That Committee also comprises representatives of the Securities Exchange Commission of Zimbabwe, the Ministry of Finance, and the Board of the ZSE. It is a technical Statutory Committee set up in terms of the Law. The Zimbabwe Stock Exchange was furnished with the first draft of the Circular on 5 November 2016 and had more than 2 months to review the Circular prior to approval of the Circular by the Listings Committee on 16 January 2017. All issues that were raised by the Listings Committee were addressed to their satisfaction resulting in the approval being granted. The Company would not have published the Circular without the approval of the Zimbabwe Stock Exchange Listings Committee. We attach below the approval that was granted to the Company:

Reserve Bank of Zimbabwe’s Facilitation to enable local participation in the Econet Wireless Zimbabwe Limited Rights Offer

In order to protect the Zimbabwean Resident shareholders of Econet Wireless Zimbabwe Limited who were designated as Resident in the Register of Members of the Company as at the 17th January 2017 (“the Resident Shareholders”), being the date of issue of the Rights Offer Circular, Econet Wireless Zimbabwe Limited and the Reserve Bank of Zimbabwe have agreed as follows:

Econet shall open a Rights Offer account with a local Receiving Bank into which those shareholders designated as Resident Shareholders in the Register of Members of Econet Wireless Zimbabwe Limited shall deposit the proceeds of the Rights Offer using cash, Bond Notes, or electronic money in accordance with the Rights Offer timetable as published in the Company’s Circular dated 17 January 2017.

In this regard, two accounts have been opened and the Rights Offer proceeds from the Resident shareholders shall be deposited into either of the following accounts:

Account name : Econet Rights Offer Account
Bank : Steward Bank Limited
Account number : 1001676152
Branch : Nkwame Nkrumah

Account name : Econet Rights Offer Account
Bank : CBZ Bank Limited
Account number : 03320597880261
Branch : Sapphire Branch

In exchange for the amount paid by the Resident Shareholders into the Company’s account with a local receiving bank, the Underwriter shall pay the equivalent of the amount contributed by the Resident Shareholders and on behalf of the Resident Shareholders to the international Receiving Bank, AFREXIMBANK in accordance with the terms of the Circular.

Those Resident shareholders who follow their rights by paying into the designated local account shall be deemed as having discharged their obligations as set out in the Rights Offer Circular and shall be entitled to the issue and allotment of their Rights Offer Shares in accordance with the terms of the Rights Offer Circular.

In the event that any Resident Shareholder sells their Rights Offer Shares to non- residents, the foreign currency thereby generated shall be remitted to the Reserve Bank of Zimbabwe and allocated towards the remittance of the money due to the underwriter.

The Reserve Bank of Zimbabwe shall agree with the Company on a schedule for the remittance of the money held on behalf of the underwriter over the period during which the foreign debt was repayable and in equal instalments.

Extraordinary General Meeting to proceed as scheduled

Under the circumstances, the Company has decided to proceed with its scheduled meeting to consider the matters tabled in the Circular to Shareholders which was issued on 17 January 2017. Shareholders are advised to submit their proxies and attend the meeting. All communication pertaining to the meeting that is not issued by the Company should be ignored.

By order of the Board
C A Banda

Related download – Rights Offer Media Release.pdf