eBusiness Weekly
Business Writer
Mobile Network giant, Econet Wireless Zimbabwe, has reduced its debt exposure after 24,57 percent of the company’s debenture holders opted for early redemption.
Through debentures, Econet owed US$72,9 million and was seeking to reduce that through early redemption.
As part of the early redemption, Econet plans to pay debenture holders in local Zimbabwe dollars calculated at the prevailing interbank rate.
The debentures, which had a six-year tenure up to January 2023, stem from a US$130 million capital raise exercise, about half of which were debentures, which Econet undertook in 2017, as the company moved ahead of time to mobilise the foreign currency needed to settle external loans.
Econet, however, believes that through early debenture redemption it will be able to strengthen its balance sheet by reducing the amount of its foreign currency exposure and to minimise any future exchange losses that might result from the weakening of the Zimbabwe dollar against the USD.
“Early redemption over an extended period, in accordance with the requirements of the RBZ, benefits the company in that the cashflows can be managed over an extended period of time,” Econet said in a notice to debenture holders mid-July.
The offer for early redemption, which was announced on 13 July 2021 closed on the 2nd of August 2021 and at least 255 holders owning 260,722,325 had accepted the offer.
“Debenture holders opted to redeem US$14,8 million, representing about 22,34 percent of the accrued value of the debentures as at 31 August 2021.
“All offers for early redemption have been accepted by the Company. Payment will be made in full on or before 30 September 2021. The amount to be paid falls within the threshold approved by the Reserve Bank of Zimbabwe,” Econet said in a statement released Monday.
The debentures are being redeemed at the face value of 4,665 US cents each plus interest thereon calculated at a coupon rate of 5 percent per annum and compounded annually from the date of issue up to the date of payment.
Debenture holders who choose not to offer some or all of their debentures for early redemption will retain those debentures on the terms and conditions on which they were issued.
