Africa-Press – Zimbabwe. Econet Wireless, Zimbabwe’s largest technology company, says its shares are “grossly undervalued” on the Zimbabwe Stock Exchange (ZSE).
At current prices, the company is valued at approximately US$628 million, a figure Econet argues does not reflect the true worth of its business and infrastructure.
The company added that the low valuation has made it more difficult to raise affordable funding for network upgrades and new technologies.
Several major companies have already moved to the US dollar-based VFEX, where they believe valuations are fairer and capital-raising is easier.
A cautionary announcement issued by Econet Wireless Group Company Secretary, Tatenda Alice Ngowe, on Wednesday, 03 December, reads:
“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 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.”
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