Online Reporter
Business Reporter
Econet Wireless Zimbabwe has resolved to voluntarily delist from the Zimbabwe Stock Exchange (ZSE) to unlock shareholder value and subsequently list its core infrastructure assets on the United States dollar-denominated Victoria Falls Stock Exchange (VFEX).
The move, detailed in a cautionary announcement released on Tuesday, will see the telecommunications giant separate its passive infrastructure—including real estate, towers, and power assets—into a new subsidiary named Econet Infrastructure Company Limited (Econet InfraCo).
Econet’s board has said the primary motivation for the delisting is the company’s “significant discount” in valuation compared to its African peers.
The company has noted regional counterparts, which have already unbundled their passive infrastructure, trade at an estimated six to eight times Enterprise Value/ Earnings Before Interest, Taxes, Depreciation and Amortisation.
Econet says the creation of Econet InfraCo aligns with international best practice for Mobile Network Operators (MNOs) by housing passive infrastructure in a dedicated Tower Co.
“This approach enables clearer visibility of asset values, focused capital allocation and a distinct operational strategy for infrastructure deployment and management,” the company.
The subsequent listing of Econet InfraCo on the VFEX, planned by way of introduction, is central to the value creation strategy.
The board believes infrastructure assets are “better understood and valued within US dollar-based property and infrastructure markets,” citing the higher price-to-earnings multiples achieved by real estate and infrastructure firms already listed on the VFEX.
Prior to the delisting becoming effective, Econet will extend a voluntary exit offer to eligible shareholders who do not wish to remain invested in an unlisted company.
The exit offer will be settled partly in cash and in shares in the newly established Econet InfraCo, the company says.
Econet will allocate up to 30 percent of Econet InfraCo’s issued shares to settle the exit offer, retaining the remaining 70 percent.
An independent valuation expert will determine the value of Econet InfraCo’s shares to ensure “fairness, transparency, and regulatory compliance.”
The proposed delisting from the ZSE is subject to final shareholder approval, as required by the listing requirements.
