Econet Exit KMAL

ECONET Wireless yesterday walked out of the troubled Kingdom Meikles Africa Ltd after selling its stake in the blue chip group for US$27 million.

 In a statement issued to the market last night, the company said it had sold its 24 537 480 shares in KMAL at $0,71 per share. 

This represents a premium of 29% on KMAL’s closing price of $0,55 before its suspension from the Zimbabwe Stock Exchange last month. Market analysts yesterday questioned how shares of a specified company could be sold.

The company said the US$17 million would be directed towards its network expansion.

Econet 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 yesterday, 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 said.

However, sources close to KMAL former chairman John Moxon and outgoing chief executive officer Nigel Chanakira said a consortium led by Rugare Chidembo –– a former non executive director in the group who is now MD for Pinnacle Holdings.–– had bought the shares. The consortium also includes RTG boss Chipo Mtasa, Zimre Holdings Ltd Chief Operating Officer Solomon Tembo, businessmen Philip Chiyangwa and Langton Nyatsambo.

This comes amid out-of-court negotiations between Chanakira and key shareholders in the blue chip company, among them Moxon, aimed at finding an amicable demerger of KMAL.

Chanakira, who is receiving medication in South Africa after he was airlifted from Harare last Monday, told businessdigest yesterday that the talks were centred on resolving the outstanding issues of the de-merger.

Shareholders of the group agreed in June to de-merge it after boardroom fights erupted 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 –– Calisto 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 reports of him collapsing were “unfortunately exaggerated”.

The assertion that he collapsed were made by one of his lawyers –– Canaan Dube –– in a supporting affidavit in an application 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 KML 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 to say there is goodwill on both sides to put this behind us.”

Chanakira and Moxon are embroiled in a boardroom row over the control of KMAL amid accusations that the top banker had lined up Zanu PF politicians to take over the blue chip company.

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 since been specified by the government.

The boardroom spat has seen the value of the Zimbabwe Stock Exchange listed company drop from US$500 million last year to US$90 million. (The Independent)