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Oliver Kazunga, Senior Business Reporter
ECONET Wireless and the Reserve Bank of Zimbabwe have put in place a facility that will enable the firm’s local shareholders to participate in the rights offer to raise $130 million it requires to clear foreign loans.

The company, which is Zimbabwe’s leading telecommunications firm, last month announced plans to raise $130 million through issuing additional shares and debt as it bids to clear offshore loans.

The firm owes a number of creditors — China Development Bank, African Export Import Bank (AfreximBank), Ericsson and South Africa’s Industrial Development Bank over $128 million.

Econet yesterday said it had reached an agreement with the Reserve Bank of Zimbabwe in a matter pertaining the firm’s local shareholders’ participation in the rights offer.

“In order to protect the Zimbabwean 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 . . .”

As part of the agreement, Econet said, it will 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 shall deposit the proceeds of the rights offer.

The rights offer proceeds would be deposited using cash, bond notes, or electronic money in accordance with the rights offer timetable as published in the company’s circular on January 17. Rights Offer proceeds shall be deposited into Steward Bank.

Econet said:

“In exchange for the amount paid by the resident shareholders into the company’s account with a local receiving bank, the underwriter will 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.”

It said 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.

The resident shareholders will 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 RBZ and allocated towards the remittance of the money due to the underwriter.

“RBZ 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.

“In the circumstances, members are advised that the company’s extraordinary general meeting shall proceed as published in the circular,” it said.

Between 2012 and 2014, Econet secured over $460 million in multi-creditor loans to expand its network and refinance earlier facilities.

The telecommunications firm plans to offset its secured long-term loan obligations, which now amount to $128 million, using the rights issue and debenture cash.

— @okazunga.