CLOUDINE MATOLA
Ecocash Holdings Zimbabwe shareholders have approved its proposed sale of six assets to Econet Wireless Zimbabwe, the biggest mobile network operator in the nation, taking the deal a step close to completion, Business Times can report.
A vote was taken at an extraordinary general meeting (EGM) held on April 17 2024 in the capital Harare.
The latest development was revealed by Ecocash Holdings’ group company secretary Charmaine Daniels.
This means that Econet Wireless Zimbabwe will take over management of Ecocash’s mobile money division, VAYA Technologies, MARS Zimbabwe, Econet Life, Econet Insurance, and Maisha Health subject to regulatory approvals.
The separately listed companies announced that they are planning to undergo a scheme of reconstruction, which involves the issue of ordinary share capital by a company to the shareholders in another company. Ecocash Holding’s sole subsidiary, Steward Bank, will continue to exist, which may indicate that a new brand is required.
Daniels added that in return Ecocash Holdings will get ZW$509bn which is equivalent to 521,861,057 Econet shares.
“That, subject to Regulatory approval, the directors are authorized to carry out a Scheme of Reconstruction between Econet and EcoCash Holdings by transferring to Econet the Financial Technology Businesses namely EcoCash (Private)Limited, VAYA Technologies Zimbabwe (Private) Limited, Econet Insurance (Private) Limited, Econet Life (Private) Limited, MARS Zimbabwe (Private) Limited and Maisha Health Fund (Private) Limited, in exchange for the total consideration of ZWL$509bn (equivalent to 521,861,057 Econet Shares) payable partly in cash and partly in Econet Treasury Shares,” Daniels said.
Furthermore, Daniels stated that the amount of Econet Treasury Shares will be ascertained by utilizing the Econet 30-day volume weighted average price for the period ending on January 16, 2024, which is the latest feasible date just before the transaction’s public announcement.
Additionally, the 30-day volume weighted average price of each Econet share for the period leading up to the payment date will be used to calculate the amount of the cash component of the total consideration.
Under the terms of the swap deal, Ecocash investors will receive Econet shares in return.
Essentially, the entities that will be absorbed by Econet Wireless Zimbabwe, are taking a significant component back to Econet Wireless Zimbabwe.
Interestingly, Econet and Ecocash, which were formerly a single company, intend to reunite once more after their 2018 split.
The new company was renamed to Ecocash Holdings in 2021 after being listed under the name Cassava Smartech.
