Shareholders of Econet Wireless and EcoCash Holdings have given their approval for the companies to raise $30.3 million each through a rights issue to redeem shareholder debt that was extended five years ago. The resolutions were passed at separate extraordinary general meetings with overwhelming majorities.
These debentures were initially issued to fund Econet’s expansion plans, and even though part of the debt was redeemed earlier, an economic downturn in Zimbabwe left both companies owing $30.3 million in debentures. The rights issue will provide a way to address these obligations.
Econet shareholders showed strong support, with 99.21% approving the resolution for renounceable rights, and 88.74% agreeing that the rights could only be renounced in favor of existing shareholders. For EcoCash Holdings, 83.51% of shareholders voted in favor of the renounceable rights offer.
While both companies can now manage the debt, the rights issue will further enhance their financial health and allow them to invest in their growth and technological upgrades. Econet aims to focus on modernizing its network infrastructure, while EcoCash Holdings plans to invest in new digital infrastructure to keep up with emerging technologies and evolving customer needs.