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Econet seeks share buy-back approval at AGM

Econet seeks share buy-back approval at AGM

Zimbabwean telco Econet Wireless is looking to secure shareholder approval for a renewed share buy-back scheme and placement of unissued shares under the control of directors at the company's next AGM scheduled for 24 September 2019.

In a notice to shareholders on Tuesday, Econet company secretary Charles Banda said the share buy-back proceeds will help the company to pay off its debt.

"After considering the effect of the maximum repurchase of the shares, the directors are confident that the company will be able to pay its debts for a period of 12 months after the date of the Annual General Meeting," said Banda.

Another resolution being pursued at the AGM reads: "That the authorised but unissued shares of the Company be and are hereby placed under the control of the Directors who may issue them as they deem fit, subject to the Memorandum and Articles of Association of the Company and subject to the Listing Rules of the Zimbabwe Stock Exchange."

In June this year, Econet said it had long term interest bearing liabilities amounting to ZWL72,165 000 as well as short term interest bearing debts amounting to ZWL2, 634 000 as at the end of February 2019.

The company stated that t the long term interest bearing debt "comprises unsecured redeemable debentures with an annual compounding coupon rate of 5% and a tenure of 6 years".

"The debentures are redeemable at the end of April 2023 or earlier at the discretion of the Board at a price determined by adding to the subscription price the cumulative interest calculated at the coupon rate compounded annually up to the date of redemption," reads an excerpt from the company's financial statements.

On Tuesday, the Zimbabwean telco also highlighted that under a special business, the share buy-back scheme was being pursued in line with authorisation provided for under Article 10 of its Articles of Association.

This mandates the company to "undertake the purchase of its own ordinary shares in such manner or on such terms as the Directors may from time to time determine, provided that the repurchases are not made at a price greater than 5% above the weighted average of the market value" for the securities.

The maximum number of shares authorised to be acquired by the company shall also not exceed 20% of its issued ordinary share capital.

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