Minority Shareholders Stand Together Against Econet Founder
Because of this outcry, a shareholder vote on the conversion of debentures to shares in the Zimbabwean telecoms operator has been postponed to 14 December 2018.
Econet Wireless had made the decision to unbundle and separately list its FinTech division, which is in charge of the mobile money service EcoCash, under Cassava on 11 December 2018.
Shareholders who attended the company’s general meeting at the end of November 2018 described the meeting as tense.
Analysts who were in attendance claimed to have been chased away, while sources who are employed at the company said that the debenture issue is a sensitive one.
Sources close to the matter have said that minority shareholders feel disadvantaged by the way that Masiyiwa is handling the issue concerning debentures in the company.
In a communication to shareholders ahead of the meeting, Econet stated that it needed a special resolution to convert debentures into equity, with approximately 1,166,906,618 debentures that were issued being changed into ordinary shares.
The debentures were initially issued in 2017 as part of Econet’s efforts to raise US$130 million under a rights issue. This happened after Masiyiwa underwrote the debentures following differences with the Zimbabwe Stock Exchange (ZSE), which was eventually resolved following an intervention by the Reserve Bank of Zimbabwe (RBZ).
It was concluded at the general meeting that the conversion into shares was to be done at the same discount at which shares had been issued at the time of the rights offer, on the basis of 93.3 new ordinary shares for every 100 debentures held. This would at least put the debenture holders in the same position they would have been in had the Company not forced them to take debentures instead of shares.
Minority shareholders have been in discussions with the ZSE to express their concern over the modalities for the conversion.
Credit: This article originated from www.itwebafrica.com