Econet to list Cassava on Tuesday, postpones EGM

Harare – Econet Zimbabwe Wireless in a notice to shareholders Friday said it will list Cassava SmarTech Zimbabwe on the Zimbabwe Stock Exchange on Tuesday December 18 and has subsequently postponed an Extra-ordinary general meeting which was supposed to be held today.

The postponed EGM wanted reach a resolution to convert debentures to equity.

Demerging and listing of the technology company Cassava separately from Econet on the main bourse is expected to allow the group to focus on the growing digital service opportunities in Zimbabwe.

This growth will be focused on mobile and internet penetration, infrastructure, group synergies, payment platform, and brand recognition and acceptance seen as conducive to future growth.

The demerging of Cassava will remove 39 percent of the mobile phone operator’s revenue, according to its most recent accounts.

“Following the creation by CSZL of a distributable reserve from its earnings received from its subsidiaries, the company capitalised the reserve through a capitalisation or bonus issue of 1,590,577,241 Ordinary Shares of a nominal value of US$0.001 per share to the members of CSZL pro rata to their shareholdings. Consequently, 2,590,577,241 issued ordinary shares in Cassava Smartech Zimbabwe Limited will be listed by way of introduction on the Zimbabwe Stock Exchange on Tuesday the 18th of December 2018,” said Econet.

If listed, the transaction will see 770 000 000 CSZL shares representing 77 percent of the initial issue were issued on credit to members of EWZL pro rata to their shareholdings as at the record date; 200 000 000 shares representing 20 percent of the initial issue were issued on credit to EWZL and 30 000 000 shares representing 3 percent of the initial issue were issued on credit to the Employee Share Trust for the benefit of both EWZL and CSZL employees as at the record date;

As a result of the demerger, 583,453,309 debentures being 50% of 1,166,906,618 debentures in issue in EWZL will be transferred to CSZL, with the balance remaining in EWZL.

The split of the debentures between EWZL and CSZL has been necessitated by the fact that debenture conversion has not yet taken place.

“The debentures in issue have a nominal value of 4.665 US Cents per debenture and a coupon rate of 5 percent per annum and are redeemable on 3 May 2023. Therefore, the conversion of the debentures has been postponed sine die.”

Meanwhile, the Company said it further postpones the Extraordinary General Meeting and the resolution for the conversion of debentures to equity sine die.

“After debenture holders holding 84.8 percent of the Company’s issued share capital accepted the offer for the conversion of debt to equity as proposed in the circular to shareholders, dated 8 November 2018, some minority shareholders raised concerns about conversion of debentures to equity.

“Consequently, the board decided to adjourn the Extraordinary General Meeting that was held on 29 November 2018 to 14 December 2018 to allow time for the Board of directors to consider the concerns.”

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