Date: 22 September 2005 05:37:29 GMT+03:00
Subject: [DigAfrica] Econet buys back Sh6b stake from partner
Econet buys back Sh6b stake from partner
By Bryan Mbugua
Econet Wireless Group (EWG) yesterday paid Allied Technologies Group
(Altech) over Sh6 billion to acquire back 50 per cent shareholding in
Botswana-incorporated Econet Wireless Global.
The buyout was made ahead of the payment deadline that was due on October.
In a statement, Econet Group Chief Executive Officer Strive Masiyiwa
said the group had decided to make full payment in advance to enable
the business function normally and to begin implementing its expansion
programmes.
Masiyiwa said following the payment, Econet will reconstitute its
board of directors to focus on a number of projects of projects in the
pipeline.
Econonet Wireless Kenya, a subsidiary of Zimbabwean Econet Wireless
Group, won the bid to roll out the third mobile network in Kenya, but
its launch has been locked in wrangles between shareholders.
Altech, a South African company also listed on Johannesburg Stock
Exchange, bought half ownership of Econonet Wireless Group last
November for about Sh5 billion.
However, fallout among the shareholders led Econet to opt for an
out-of-court settlement over the disputed Botswana operations.
Earlier, Altech had applied to the High Court in Botswana to wind up
the Econonet Wireless Group.
In the application, Altech had sought to either buy out original
Econet shareholders, including the family of CEO Strive Masiyiwa, or
sell its stake to them for about Sh7.5 billion, incase its winding up
application failed.
"Although the settlement agreement between the parties only required
Econet to come up with a bank guarantee by September 20, and make
final payment by the end of October, the company decided to make full
payment in advance," Masiyiwa said. Econet Wireless Global would
continue to operate as a Botswana-based wholly-owned subsidiary of the
group.
"Econet Wireless Group today completed its payment to Altech for its
50 per cent stake in Econet Wireless Global.
"This will enable the business to function normally and begin to
implement its own expansion programmes.
An early settlement also allows us to reconstitute the board and also
complete some of the projects in the pipeline. Now that we have paid
Altech, their directors on our board have also resigned and we can now
replace them which is important for our corporate governance," he said.
Masiyiwa said the group would continue with its expansion programme in
the telecommunications sector and with the arbitration process in
Nigeria to increase its stake in Vee Mobile, formerly Econet Wireless
Nigeria.
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