Econet Wireless has made an exciting value proposition for its shareholders, assuring investors that those who choose to remain invested in the company stand to benefit from a new structure designed to improve value recognition, strengthen long-term returns and create a more sustainable platform for price discovery.
This follows the company’s announcement that it intends to voluntarily migrate from the main Zimbabwe Stock Exchange (ZSE) to an Over-the-Counter (OTC) trading platform on the Victoria Falls Stock Exchange (VFEX) while simultaneously listing its infrastructure subsidiary, Econet InfraCo, on the VFEX.
In a circular to shareholders published on Wednesday, Econet said that after the proposed migration, its shares will continue to be tradeable through the Over-the-Counter trading platform administered by VFEX, ensuring shareholders are not left stranded without a market for their shares.
The move offers shareholders choice and protection – allowing investors to remain invested in Econet’s core business under continued public-company safeguards, while gaining access to the group’s infrastructure value through the separate listing of Econet InfraCo.
Crucially, the migration does not turn the business into a private entity. Instead, the company will remain a public company, continue publishing audited financial statements and maintain ongoing shareholder communication in line with sound corporate governance expectations.
According to the circular, the restructuring seeks to address what the Econet board described as a prolonged “market valuation disconnect” on the ZSE, where the company believes the share price had failed to reflect its tangible assets, operational performance and long-term growth prospects.
Under the proposed OTC framework, Econet will also have the ability to set a minimum trading price for its shares, shielding shareholders from distressed selling at heavily discounted levels. The company indicated that a floor price of US$0.50 per share will apply, providing a stronger value anchor than what has historically been supported by thin trading volumes on the ZSE.
In another measure that should excite investors, Econet said it plans to support liquidity through company share repurchases.
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After an initial period of up to 12 months from the effective date of migration to the OTC, the company intends – subject to solvency and liquidity requirements – to repurchase up to 10 percent of its issued shares in that financial year at a cash floor price of US$0.50 per share, giving shareholders an additional value-support mechanism over time.
Shareholders will be asked to vote on the proposal at a shareholder meeting as required under listing rules and applicable legislation. Econet emphasised that the proposal does not compel any shareholder to sell their shares, and that investors who remain will continue participating in the company’s future performance under the revised structure.
For those who may still prefer to exit, Econet has offered an Exit Offer of US$0.50 per share, structured as a blended settlement of US$0.17 in cash and US$0.33 in Econet InfraCo shares, with shareholders receiving one Econet InfraCo share for every Econet share tendered.
Econet has positioned the broader restructuring as a value-unlocking initiative, arguing that its ZSE market capitalisation has not adequately reflected the underlying strength of its business and asset base. The board said constrained liquidity and reduced participation by foreign investors have impaired price discovery on the ZSE, limiting shareholders’ ability to trade at fair value.
