Zimbabwe’s Empowerment Corporation (E Corp) – a consortium which owns a 40% interest in the country’s third largest mobile operator Telecel – has offered a 15.5% stake in the cellco to local investment firm Brainworks Capital Management. According to a report from The Herald, the USD7.75 million deal has been agreed to allow E Corp to repay debts owed to Brainworks and South Africa’s ABSA Bank.
The news is a blow to the Zimbabwe government, which earlier this year acquired 60% of Telecel from VimpelCom and was looking to buy out E Corp to take full control of the operator. Telecel has been struggling financially and has been losing subscribers to its two larger rivals, Econet Wireless and NetOne. ICT and Courier Services Minister Supa Mandiwanzira says the government had hoped to get the cellco back on an even footing within two years, before then selling the firm or listing its shares on the local stock exchange. The minister adds that the state is still looking to acquire 100% of Telecel, with Brainworks also saying that is has no interest in remaining as a Telecel shareholder, suggesting that a full government takeover is still on the cards.
According to TeleGeography’s GlobalComms Database, Telecel had 13.7% of Zimbabwe’s mobile subscribers at the end of June 2016, down from 16.2% a year earlier. E Corp’s investors include James Makamba’s Kestrel Corporation, Leo Mugabe’s Integrated Engineering Group (IEG) and Jane Mutasa’s Indigenous Business Women Organisation.