HomeBusiness DigestTeleAccess boss to slash stake in firm

TeleAccess boss to slash stake in firm

Shakeman Mugari

TELEACCESS chief executive and majority shareholder Daniel Shumba could slash his stake in the fixed telephone firm to make way for other investors to raise funds to enable the company to lau

nch operations.

Shumba, who is TeleAccess’ founder, will offer the bulk of his shares to institutional investors as he tries to raise funds to roll out the network which has been stalled for the past two years.

TeleAccess needs more than $1 trillion to kick-start its network after inflation and logistical delays cranked up costs of equipment.

Shumba, who was last year expelled as Zanu PF chairman for Masvingo for taking part in the controversial Tsholotsho meeting, has previously insisted on remaining TeleAccess’ sole owner.

Sources say the climbdown and invitations to other financiers came earlier this year after Shumba failed to raise enough capital to start the project. It also came after he failed to entice foreign companies to buy into the project.

The sources said the company now plans a private placement to raise money by offering shares to interested investors. There are also plans to list the company on the Zimbabwe Stock Exchange.

The Zimbabwe Independent understands that Shumba and other top TeleAccess officials travelled to South Africa last week to meet their financial advisors to prepare the private placement documents that the company would take to investors next week.

The documents were expected to arrive this week. TeleAccess is understood to have already sounded some targeted investors who are said to be keen on pouring money into the company.

The effort to lure investors is likely to see them approaching companies like Old Mutual and others with a strong presence in listed firms.

Shumba plans to reduce his stake to about 30% by disposing of most of the stake to the market. A company spokesperson confirmed that there were plans for a private placement.

“A telecoms project requires vast sums of money to commission and TeleAccess has launched a capital raising initiative in order to meet this requirement,” she said.

She said the fund-raising was already underway.

“The capital raising exercise is going well and there is high interest in TeleAccess because of its potential to alleviate abysmal telecommunication standards in Zimbabwe,” said the spokesperson.

TeleAccess has been surviving on an overdraft facility with the Commercial Bank of Zimbabwe since its inception. The overdraft has since ballooned to more than $180 billion.

The company has also lost some of its top employees while those who have remained complain of low salaries which often come late.

The financial crisis at TeleAccess has fed market speculation and media reports that the CBZ had converted its debt into equity, making it the majority shareholder in TeleAccess with 57%.

CBZ chief executive and managing director, Nyasha Makuvise, has however dismissed the reports saying the bank did not own anything in TeleAccess.

TeleAccess has also had fights with the Postal and Telecommunications Regulatory Authority of Zimbabwe over its delay to start up. Angry letters have been flying back and forth between the two parties.

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