HARARE – EcoCash Holdings Zimbabwe Limited has announced significant progress in its Scheme of Reconstruction, as approved by shareholders during an Extraordinary General Meeting (EGM) held on April 17, 2024.
The company revealed that the Exchange Control Authorities have approved the distribution of the Scheme’s proceeds to foreign shareholders, following approval of the restructuring plan. In addition, the Zimbabwe Revenue Authority (ZIMRA) has accepted the company’s election under Section 15(2) of the Capital Gains Tax Act, which allows the transfer of shares from EcoCash’s Financial Technology Businesses to Econet to be taxed on a specific capital gain amount. This exemption applies regardless of any agreement of sale terms.
As a result, the EcoCash Holdings Board has passed a series of resolutions:
Econet Share Transfer: Out of the 521,861,057 Econet shares due to EcoCash under the Scheme of Reconstruction, 49,918,547 shares will be transferred back to the company. This move will allow EcoCash to liquidate its obligations and meet capital requirements, leaving 472,742,510 Econet shares for further distribution among shareholders.
Share Distribution: Of the remaining 472,742,510 shares, 50% (or 236,371,255 shares) will be distributed as scrip dividends to shareholders. Each EcoCash Holdings shareholder is entitled to receive 0.067807 Econet shares for each EcoCash share they hold.
Cash Equivalent: The remaining 236,371,255 Econet shares will be sold, with the cash equivalent to be distributed to shareholders as part of their entitlement.
This restructuring initiative is part of EcoCash’s broader strategy to optimize capital allocation and shareholder value while maintaining compliance with regulatory requirements.