Econet Wireless has set the value of Econet InfraCo, its infrastructure development and management business, at US$1 billion, according to a circular published today.
With Econet Infraco set to be listed on the Victoria Falls Stock Exchange (VFEX), this could easily make it the biggest IPO in Zimbabwe’s capital markets history.
Econet published details of its infrastructure, power, and real estate company for the first time, showing strong revenue and profitability. In the circular, Econet has set out the reasoning for the valuation of Econet InfraCo.
Officials have said the decision by Econet to spin off its infrastructure division is in line with most mobile operators around the world and across Africa. Econet has gone further to include its real estate division that holds its various property portfolios.
Once it has been spun out, Econet InfraCo will be allowed to pursue other infrastructure-related opportunities in the country, including the recently announced Econet Industrial Park, which is set to be developed on a 1 000-acre site near the Harare main airport.
The listing of Econet InfraCo on the VFEX will be done by introduction, which means the Company will not be looking to raise new capital. Instead, Econet InfraCo will issue shares to existing shareholders in the Company as part of a package to create shareholder value.
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In the published Circular, Econet has indicated that it will only list Econet InfraCo if the shareholders vote affirmatively to transition Econet Wireless from the main board of the ZSE to an Over-the-Counter system that enables Econet to set a minimum price for its shares in order to protect shareholder value. The controlling shareholder has been precluded from voting by the Zimbabwe Stock Exchange.