Chronicle Editor
Business Reporter
LISTED telecoms giant, Econet Wireless Zimbabwe is considering calling an Extra Ordinary General Meeting to get approval from shareholders to buy more shares from the firm to raise approximately US$30,3 million that is required to redeem the outstanding debentures in the capital of the company.
A debenture is a type of debt instrument that is not backed by any collateral but by creditworthiness and reputation of the issuer and is issued by corporates to raise capital for their projects.
Additionally, it is a medium to long-term debt instrument used by large firms to borrow money at a fixed interest rate.
“Shareholders are advised that the Board of Directors of Econet Wireless Zimbabwe Limited is considering proposals to call for an Extra Ordinary General Meeting of Members for the purpose of considering a renounceable rights issue of new ordinary shares in the capital of the Company to raise a total amount of approximately US$30,3 million that is required to redeem the outstanding debentures in the capital of the company,” said company secretary, Mr Charles Banda.
“Accordingly, shareholders and the investing public are advised to exercise caution when trading in the company’s securities until such time as the full details of the proposed rights issue are published.”
In 2021, the telecoms firm said it had redeemed debentures worth US$14,8 million equivalent to an estimated $1,27 billion.
It announced that it had given investors an opportunity for early redemption of over 1,1 billion debentures it issued in 2017 to raise funds to clear its external debt.
The debts included a US$300 million syndicated loan secured after 2009 for network expansion and the creditors included Ericson, Industrial Development Bank of South Africa, AfreximBank and China Development Bank.
Econet indicated that a total of 255 debenture holders representing 24,57 percent of the total figure, opted for early redemption while 783 did not.
All the debentures amounting to 260 722 325 were accepted for early redemption while 906 184 293 were not put for early redemption.
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