Econet, has asserted that its shares are “grossly undervalued” on the Zimbabwe Stock Exchange (ZSE). Currently valued at approximately US$628 million, the company contends that this figure fails to accurately represent the true value of its business and infrastructure.

By Ropafadzo Mashawi

Econet has emphasized that its low market valuation complicates efforts to  secure affordable funding for necessary network upgrades and new technologies. Several prominent companies have opted to transition to the US dollar-based VFEX, where they perceive valuations to be more equitable and capital-raising more feasible.

In a cautionary announcement issued by the Group Company Secretary, Tatenda Alice Ngowe, on Wednesday, December 3, the company stated:

“In the discharge of its duty to enhance and preserve shareholder value, the Board has observed that the Company’s share price on the Zimbabwe Stock Exchange (‘ZSE’) is grossly undervalued in relation to the intrinsic value of the Company’s operations and infrastructure assets.

“This undervaluation has restricted the Company’s ability to raise competitively priced funding required to sustain further investment in critical network infrastructure and future technology upgrades.

“The misalignment of the Company’s market capitalisation and its intrinsic value has also resulted in the erosion of shareholder value as the Company’s market capitalisation does not reflect the growth in business.

“In this regard, the Company has commenced the evaluation of potential corporate actions aimed at unlocking shareholder value, improving access to capital, and strengthening the Company’s long-term competitiveness (the ‘Transaction’).

“The outcome of the evaluation process may have a material effect on the price of the Company’s securities.

“Accordingly, shareholders and the investing public are advised to exercise caution when dealing in the Company’s securities until a further announcement is made.

“The Board will update shareholders as soon as further information is available.”/