Harare - Zimbabwe's largest
mobile telephony company Econet Wireless plans to raise $130 million from
shareholders to pay foreign loans it is struggling to settle due to a
severe dollar crunch, it said on Tuesday.
Econet said in a statement
that to avoid defaulting on external obligations, it had decided to raise money
via a rights issue, adding that foreign currency shortages made it difficult
for the company and its subsidiaries to pay foreign loans.
The Reserve Bank of Zimbabwe
last November introduced a "bond note" currency to ease chronic cash
shortages, but long queues have remained at banks, which have continued to
impose stringent limits on cash withdrawals.
The $130 million is the
largest amount that any Zimbabwean company has attempted to raise from
shareholders since the southern African nation dumped its inflation-ravaged
currency for the US dollar in 2009, according to stock exchange data.
Read also: Econet's Neotel deal could drive competition
"To avoid defaulting on
its loan obligations, the company intends to raise foreign currency from its
members by way of a rights offer of shares and linked debentures," Econet
said.
Shareholders would buy
shares at a discounted price of 5 cents, compared to the share price of 30
cents at Monday's closing price on the Zimbabwe Stock Exchange.