Cassava Smartech listing on tomorrow
ECONET Zimbabwe’s fintech business Cassava Smartech Zimbabwe Limited (CSZL) will list on the Zimbabwe Stock Exchange (ZSE) tomorrow.
This comes after regulatory approvals to spin off the telecoms giant’s smart technology and financial technology businesses under a new holding company CSZL. The company controls 100 percent of Steward Bank, 100 percent EcoCash Limited, 85 percent Econet Life and 90 percent Econet Insurance. CSZL shares will list by way of introduction. Following finalisation of the conditions precedent to the demerger from Econet 770 million CSZL shares representing 77 percent of the initial issue were issued on credit to members of Econet pro rata to their shareholdings as at the record date.
A notice to shareholders also notes that 200 million shares representing 20 percent of the initial issue were issued on credit to Econet.
In addition to that, 30 million shares representing 3 percent of the initial issue were issued on credit to the Employee Share Trust for the benefit of both Econet and CSZL employees as at the record date.
“Following the creation by CSZL of a distributable reserve from its earnings received from its subsidiaries, the company capitalised the reserve through a capitalisation or bonus issue of 1 590 576 832 Ordinary Shares of a nominal value of 0,1 cent per share to the members of CSZL pro rata to their shareholdings.
“Consequently, 2 590 576 832 issued ordinary shares in Cassava Smartech Zimbabwe Limited will be listed by way of introduction on the Zimbabwe Stock Exchange on Tuesday December 18, 2018,” said Econet.
According to an earlier circular to shareholders by Econet, the costs of the unbundling amount to approximately $2 million which relates to advisory fees, printing, regulatory fees, listing expenses and other professional charges.
Management are upbeat of CSZL’s prospects which should benefit from the broader spectrum of digital service opportunities.
“Importantly, all key drivers such as subscribers, mobile penetration, internet penetration, infrastructure, group synergies, payment platform, and brand recognition and acceptance, are conducive to future growth, while the current challenges pertaining to lack of access to quality education, healthcare, and agricultural services present opportunities for the business going into the future.
“The business will pursue opportunities in the mobile business payments (Mobile Business Wallet) to tap into high value transactions. There are opportunities being pursued to integrate with the remaining banks to grow the ecosystem and entrench mobile payments,” said Econet.
The company is also banking on the insurance business which provides opportunities for growth on the back of the low insurance penetration, still below 15 percent.
The banking unit see opportunities in the sector and will explore opportunities in mortgage facilities targeting salaried employees, housing development projects, funding of health sector facilities and other renewable power.
“There are also opportunities to mobilise forex through tailor-made products that target Non-Resident Zimbabweans such as forex denominated mortgage facilities” the group said.
Meanwhile, the group has postponed its extraordinary general meeting (EGM).
The telecoms giant said “after debenture holders holding 84,8 percent of the company’s issued share capital accepted the offer for the conversion of debt to equity as proposed in the circular to shareholders, dated November 8, 2018, some minority shareholders raised concerns about conversion of debentures to equity.
“Consequently, the board decided to adjourn the Extraordinary General Meeting that was held on November 29, 2018 to December 14, 2018 to allow time for the Board of directors to consider the concerns. Take note that the directors are still considering the issues. Consequently, the company hereby further postpones the proposed conversion of debentures to equity and the Extraordinary General Meeting sine die.”