HomeBusiness DigestMasiyiwa tightens grip on Econet

Masiyiwa tightens grip on Econet

Staff Writer

TELECOMS tycoon Strive Masiyiwa and business partner Nigel Chanakira on Friday tightened their grip on telecommunications giant Econet Wireless Holdings Ltd


Masiyiwa, Econet founder and chief executive officer, however did not need to attend the Extraordinary General Meeting (EGM) to supervise the major deal.

He remained at his new base in Johannesburg.

The move came as Econet published its results for the full year ended June 30 where basic earnings per share shot up 640% from $1,18 to $8,76.

Analysts said this was a notable increase considering that the group had been unable to increase tariffs due to regulatory control by government.

The group is now lobbying for tariffs of US$0,20 a minute in line with regional tariffs. At the moment Econet is only able to charge US$0,01 a minute.

At last week’s EGM shareholders approved the Mascom Botswana deal with the only amendment being the adjustment in the number of issued Class A ordinary shares from 918 705 438 to 739 843 680 shares.

Mascom is Botswana’s premier mobile operator.

As a result Masiyiwa, using his companies TS Masiyiwa Invest-ments (Pvt) Ltd (SMI) and Dunstone Investments (Pvt) Ltd, will now own 60% of Econet’s shareholding, down from the 64,1% he wanted.

Dunstone and SMI are companies owned by trusts set up for the benefit of Masiyiwa and his family.

The move will result in Masi-yiwa increasing his shareholding substantially to more than 224 million shares in Econet.

Chanakira, founder and deputy chairman of Kingdom Financial Holdings Ltd and a major player in the financial services sector, has 7 990 000 shares in Econet, the second largest stake in the telecommunications concern.

He is closely followed by company chairman Professor Norman Nyazema who has 2 175 000. The shares are currently valued at $62 each.

The three tycoons have set up base in South Africa where business opportunities and prospects are much rosier than in Zimbabwe.

Both Masiyiwa and Chanakira initially reduced their shareholding in Econet when the company was going thrugh turbulent times.

Masiyiwa reduced his chunk from 224 811 396 on June 30 2002 to 224 717 569 on June 30 this year, while Chanakira cut his from 10 440 000 to 7 990 000.

Masiyiwa founded Econet and then listed it on the Zimbabwe Stock Exchange after a gruelling battle with the then Minister of Information, Posts and Telecommunications Joyce Mujuru for his operating licence.

Econet now has a market capitalisation of $57 billion on the local bourse.

Before the deal was sealed however, the investing public, media, and the Zimbabwe government questioned Masiyiwa’s intentions.

The major bone of contention was why the deal was being given at such a huge discount to Masiyiwa and his family.

The new Econet shares were relisted on the ZSE on Wednesday.

NMB Bank Ltd was the independent financial advisor, while Deloitte & Touche, the accountants.

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