daniel chigunwe
Business Writer
EcoCash Holdings has announced that exchange control authorities from the Reserve Bank of Zimbabwe have approved the distribution of the consideration for the Scheme of Reconstruction to foreign shareholders.
The scheme, which was approved by shareholders in April 2024, involved transferring certain financial technology businesses to Econet in exchange for a total consideration of ZW509 billion.
Further, EcoCash Holdings has received necessary approvals from both the Zimbabwe Revenue Authority (Zimra) and its board to proceed with the distribution.
The consideration will be distributed partly in cash and partly in Econet Treasury Shares. A portion of the Econet shares will be used to liquidate liabilities and meet capital expenditure requirements, while the remaining shares will be distributed to shareholders.
The company noted that only the members of the company appearing in the register of members of the company at the close of business on Friday, September 13, 2024, being the record date for purposes of the distribution, shall be entitled to the distribution of the consideration for the Scheme of Reconstruction.
“The shares of the company will be last traded with rights to participate in the distribution on the Zimbabwe Stock Exchange on Tuesday, September 10, 2024, and without the rights to participate in the distribution from Wednesday, September 11, 2024,” reads the notice.
Ecocash said the distribution of both the share consideration and the cash consideration shall take place on, or around, Monday, September 16, 2024, or on such a later date as may be agreed between Econet and the Member entitled to such distribution.
It said the distribution of both the share consideration and the cash consideration will be done pursuant to the Scheme of Reconstruction and will thus be subject to the election by both the company and Econet.
This will be done in terms of Section 15(2) of the Capital Gains Tax Act that, notwithstanding the terms of any agreement of sale, the Econet shares distributed to the EcoCash Holdings Members shall be deemed to have been sold for an amount equal to the sum of the deductions allowable to Econet at the date of transfer.
“By accepting such shares, the members of the company will be deemed to have also made the same election as made by Econet and the company and to have undertaken to accept and to abide by the election made by Econet and the company.
“Econet be and is hereby authorised to apply set off in respect of the shares or the ZiG cash due to it as a shareholder of the company under the Scheme of Reconstruction,” reads the notice.
The company said it will, in due course, announce the exact amount of the cash consideration.
Bongani Ndlovu