Econet wants shareholders to make offshore payments to clear $130 million debt

Econet Wireless Holdings plans to raise $130 million through the issue of additional shares and debt as it bids to clear foreign loans, but the company will require shareholders to make offshore payments as part of the transaction.

Econet owes, China Development Bank, African Export Import Bank, Ericsson and South Africa’s Industrial Development Corporation just over $128 million. But the company says it has increasingly found it difficult to pay the loans due to foreign currency shortages in Zimbabwe. However, the transaction depends on approvals by the Reserve Bank of Zimbabwe, which has maintained a strict priority list for foreign payments since May 2016 as it seeks to manage the foreign currency shortage in the economy.

In a bid to avoid a damaging default on the foreign loans, Econet is asking its shareholders to pay for their rights issue shares in US Dollars directly to the Egypt-based Afrexim Bank, where the telecommunications giant holds a debt service account.