While news did rounds that Brainworks had bought 15.5% off the Telecel Zimbabwe’s Empowerment Corporation (EC), in a settlement arrangement, it has emerged that there is a new twist to the arrangement.
While Brainwork has already been eyeing the Telecel Zimbabwe stake over a long time with an intial bid which heavily resisted by the EC which owns 40% of the total stake, it seems they had not completely given up.
The recent attempt to get the Telecel Zimbabwe stake has faced another brick wall for Brain Works as sources close to the deal hinted that the move was illegal , null and void.
The deal is legally void since Makamba is bound by the same pre-emptive rights, that sought to get green light from the major shareholder , which in this case is now the Zimbabwean government.
According to the agreement, Dr James Makamba signed the Memorandum of Understanding representing Kestrel Corporation, while Mr George Manyere stood in for Brainworks Capital Management.
While the brainwork CEO Mr George Manyere came open about the deal, he also said this was just not about buying stake but an agreement reached to pay off what they
Part of the MoU signed by Economic Empowerment and Brainworks reads: “Brainworks shall acquire from Empowerment Corporation 15, 50 percent of the issued share capital of Telecel Zimbabwe Limited (Sale shares) for an aggregate purchase price of US$7 750 000. 00 (Purchase price). The purchase price shall be settled in accordance with clauses 2 and 3 below.
“Payment of US$2 750 000 of the purchase price shall be satisfied on completion by way of set-off against the Brainworks liability which Brainworks shall sell and cede to Empowerment Corporation in settlement of US$2 750 000.00 of the purchase price. Empowerment Corporation shall immediately thereafter carry out a share buy back of the proportionate shares held by Kestrel in Empowerment Corporation in final settlement of the Brainworks liability by Kestrel.”
Brainworks Capital Management chief executive Mr George Manyere was quoted to have confirmed the development.
“It’s not correct to say we have purchased shares in Telecel Zimbabwe, but we have money that we are owed by Empowerment Corporation and they had offered to pay using those shares,” he said.
“Government has to exercise its right to purchase the shares and our only interest is to recover our money. If we are paid in cash, then its fine.”