October 3, 2009
HARARE – A consortium of entrepreneurs, which includes businessmen Philip Chiyangwa, has acquired the shareholding of Econet Wireless in the troubled Kingdom Meikles Africa Ltd (KMAL) for a total consideration of US$27 million.
The group is led by Rugare Chidembo, a former non executive director in KMAL, who is now MD of Chiyangwa’s Pinnacle Investments, a multi-million-dollar construction company and also RTG boss Chipo Mtasa, Zimre Holdings Ltd Chief Operating Officer Solomon Tembo, and Langton Nyatsambo.
In a statement issued to the market Thursday Econet said it had sold its 24 537 480 shares in KMAL at $0,71 per share. This represents a premium of 29 percent on KMAL’s closing price of $0,55 before its suspension from the Zimbabwe Stock Exchange last month. Market analysts immediately questioned how the shares of a specified company could be sold.
Econet said the US$27 million would be directed towards its network expansion. The company said that the sale was in line with a directive issued by its board in March that the company should sell all non-telecommunication investments.
Last week, the company announced that it had sold some of its shares in Afre Corporation, the life insurance and financial services group, which owns First Mutual Life.
Econet spokesman Ranga Mberi confirmed the sale but declined to say who had bought the shares.
“The company had received numerous enquiries about the shares from both local and international investors, but had accepted an offer from a consortium made up of Zimbabweans, whose membership includes business people in the country as well as in the Diaspora,” Mberi told The Zimbabwe Independent.
However, sources close to KMAL former chairman John Moxon and outgoing chief executive officer Nigel Chanakira said the consortium led by Chidembo had acquired the Econet shares.
Moxon told Violet Gonda of SW Radio Africa last week that he had been forced to flee Zimbabwe last year after he was warned that besieged KMAL chief executive Chanakira had motivated Chiyangwa, Affirmative Action Group chairman Supa Mandiwanzira, and Youth Minister Saviour Kasukuwere to molest him.
The takeover of the Econet shares has taken place while the company and Moxon are under specification. His lawyers have dismissed the specification as illegal. Negotiations between Chanakira and key shareholders in the blue chip company are currently underway in a bid to find an amicable demerger of KMAL.
The Independent reported that Chanakira, who is receiving medication in South Africa after he was airlifted from Harare last Monday, had said Thursday that the talks were centred on resolving the outstanding issues of the de-merger.
Shareholders of the group agreed in June to de-merge following serious boardroom fights between Chanakira and Moxon.
The High Court last week postponed for two weeks the group’s extraordinary general meeting to give Chanakira time to recover. The meeting was meant, among other things, to boot out Chanakira and two of his nominees, Callisto Jokonya and Sibusisiwe Bango, from the board of KMAL.
Chanakira said recent events and developments relating to the de-merger had taken a toll on his health, but he was now on the road to full recovery.
He said press reports that he collapsed were “unfortunately exaggerated”.
But it is Chanakira’s own lawyer, Canaan Dube, who said the businessman had collapsed. He said this in a supporting affidavit to an application seeking to stop last week’s extraordinary general meeting.
“I confirm that recent events and developments related to the arduous and lengthy process of demerging Kingdom Meikles Africa Ltd have had a toll on my health,” Chanakira said. “I am glad, however, that, as a result of expert medical attention in Zimbabwe and South Africa, I am resting and recovering well. I am confident I will be able to return back to normal duty soon.”
He said his ultimate goal remained focused on ensuring the successful demerger of KMAL so that the companies can revert to their original mandate of growing their respective core businesses for the benefit of their shareholders.
“I am as keen as everyone else to conclude the demerger of KMAL so that the demerged companies can revert to their original shareholders and mandate to grow their businesses. I am confident that all parties concerned are also concerned that the outstanding issues are resolved. It is regrettable the demerger has taken longer than we expected, but I am confident the end is near,” he said. “However, due to the sensitive nature of the current initiatives, it would be premature for me to go into specific details, suffice it to say there is goodwill on both sides to put this behind us.”
Chanakira and Moxon are embroiled in a boardroom battle over the control of KMAL amid accusations that the top banker lined up Zanu-PF politicians to take over one of Zimbabwe’s largest corporate organisations.
On the other hand, Chanakira accused Moxon of externalising huge sums of foreign currency. Moxon, some members of his family and some companies under the group have been now specified by the government as a result.
The boardroom wrangle has seen the value of the Zimbabwe Stock Exchange listed company drop from US$500 million last year to US$90 million.