Shareholders approve Econet Wireless plan to delist from ZSE

CLOUDINE MATOLA

Shareholders of telecoms giant Econet Wireless Zimbabwe Limited have approved the company’s plan to delist from the Zimbabwe Stock Exchange (ZSE) after 27 years of trading and pave the way for the listing of Econet InfraCo on the Victoria Falls Stock Exchange (VFEX), Business Times can report.

Econet InfraCo is expected to list on the VFEX at the end of March, marking one of the most significant corporate restructurings in Zimbabwe’s capital markets in recent years.

The decision represents a major shift for the ZSE, where Econet has long been a dominant counter.

At the time of the announcement, the telecoms group accounted for roughly a third of the exchange’s market capitalisation and was among its most actively traded stocks, attracting both institutional and retail investors.

The restructuring is designed to unlock shareholder value and address long-standing valuation challenges that management believes have constrained the group under the current listing structure.

In a circular to shareholders published last week, Econet disclosed for the first time detailed financial information about Econet Infrastructure Company Limited (Econet InfraCo), which until now has operated as a division within the parent company.

According to the circular, InfraCo generates annual revenues of nearly US$150m and earnings before interest, taxes, depreciation and amortisation (EBITDA) of more than US$50m. The entity is debt-free, with all borrowings remaining at the parent company level.

Independent experts have valued InfraCo at approximately US$1bn, underlining the scale of assets housed within the infrastructure unit.

Econet said the separation of its passive infrastructure assets — including towers, power systems and real estate — aligns with international best practice, where mobile network operators spin off infrastructure into standalone “Tower Cos” to enhance transparency, optimise capital allocation and sharpen operational focus.

Analysts say the structure could allow investors to more clearly price the infrastructure business, particularly given its strong US dollar revenue base and relatively predictable cash flows.

Market watchers have also noted that Econet InfraCo’s business model bears similarities to a real estate investment operation, as it derives income from leasing towers, land, buildings and power infrastructure.

During Zimbabwe’s hyperinflationary era, Econet invested heavily in property as a hedge against currency volatility. The group now holds a substantial portfolio of land and buildings across the country, assets that will fall under InfraCo’s control following the restructuring.

With its own balance sheet and strategic mandate, InfraCo will be able to develop, monetise or dispose of these properties independently, potentially unlocking further value.

The company has already announced plans to establish an industrial park on a 300-hectare parcel of land near Robert Gabriel Mugabe International Airport in Harare — a project that could significantly enhance the value of its property portfolio.

As part of the transition, Econet has appointed former chief operating officer Fayaz King as the new chief executive officer of Econet InfraCo.

King, who left the group in 2019 to take up a position as Assistant Secretary-General at the United Nations Children’s Fund (UNICEF), will assume his new role effective 1 March 2026.

His return is seen as strategic, given his deep institutional knowledge of Econet’s operations and his international leadership experience.

To address potential liquidity concerns arising from the delisting, Econet has put in place arrangements for its shares to continue trading post-migration on an Over-The-Counter (OTC) platform hosted on infrastructure associated with the VFEX.

Under this framework, the company will act as a buyer of last resort at a floor price derived from a valuation based on fundamentals. This mechanism is intended to protect shareholders from value erosion while buyers are being sought, providing a measure of comfort to investors wary of diminished liquidity.

The listing of InfraCo on the VFEX is also strategically aligned with the exchange’s US dollar-denominated trading environment. Given that InfraCo’s revenues are predominantly in hard currency, management believes the VFEX provides a more suitable platform for valuation and capital raising.

Econet’s market leadership in Zimbabwe remains firmly entrenched. The company controls 88% of voice traffic, 82% of data usage and 73% of total subscribers in the country.

Its infrastructure footprint is equally extensive, comprising 234 5G sites, 1,700 LTE sites, 1,900 3G towers and 2,860 2G locations nationwide.

The group has also made significant investments in power resilience, deploying solar installations, Tesla batteries and backup generators across its network. In the first half of the year alone, 127 new sites were added, underscoring continued capital expenditure despite macroeconomic headwinds.