Online Reporter
Nqobile Bhebhe Zimpapers Business Hub
Econet Wireless Zimbabwe says it has begun evaluating potential corporate actions to unlock shareholder value, strengthen long-term competitiveness, and improve access to capital, amid internal concerns that its current share price on the Zimbabwe Stock Exchange (ZSE) does not accurately reflect the intrinsic value of its assets and operations.
In a market update, the company said the Board has determined that the counter remains significantly undervalued, a situation that has constrained efforts to raise competitively priced funding for network expansion and technology upgrades.
“In the discharge of its duty to enhance and preserve shareholder value, the Board has observed that the Company’s share price on the Zimbabwe Stock Exchange (“ZSE”) is grossly undervalued in relation to the intrinsic value of the Company’s operations and infrastructure assets,” Econet said.
The telecoms firm said the persistent undervaluation had far-reaching consequences for its investment capacity.
“This under valuation has restricted the Company’s ability to raise competitively priced funding required to sustain further investment in critical network infrastructure and future technology upgrades.
“The misalignment of the Company’s market capitalisation and its intrinsic value has also resulted in the erosion of shareholder value as Company’s market capitalisation does not reflect the growth in business,” reads the statement.
Against this backdrop, Econet says it has initiated a comprehensive review of possible strategic transactions.
“In this regard, the Company has commenced the evaluation of potential corporate actions aimed at unlocking shareholder value, improving access to capital, and strengthening the Company’s long-term competitiveness (the ‘Transaction’).
“The outcome of the evaluation process may have a material effect on the price of the company’s securities.”
The company urged investors to take a cautious stance while the assessment is underway.
“Accordingly, shareholders and the investing public are advised to exercise caution when dealing in the Company’s securities until a further announcement is made. The Board will update shareholders as soon as further information is available.”
