Econet seeking 10% share listing

8 May 2007

Econet Wireless Zimbabwe is seeking to float 10% of its shares to overseas investors in a bid to raise more than USD20 million in foreign currency for further network expansion. During the twelve months to the end of February 2007 the cellco spent ZWD47.3 billion (USD196 million at today’s official exchange rate) in CAPEX, largely financed from loans. Over 90% of the total was dedicated to network development. GSM network capacity was increased during the period from 500,000 users to 800,000. Econet also stepped up its investment in the year in other sectors to mitigate against its lack of foreign currency as well as the effects of artificially low call tariffs, which rose below the rate of inflation under regulation by the industry watchdog Potraz. The company’s investments outside telecoms contributed 15% of the year’s earnings, with the balance sheet also showing 22.2% non-telecoms investments. Despite its troubles Econet increased its annual revenue in inflation adjusted terms by 128% to ZWD181 billion (USD75 million), whilst profit before tax was up 792% to ZWD75 billion (USD31 million).