Cassava will next week become the first technology company to list on the
Zimbabwe Stock Exchange.
CASSAVA Smartech (Cassava) will next week become Africa’s first technology company to list after Econet Wireless Zimbabwe (Econet) shareholders approved the firm’s spin off. This is premium content. Subscribe to read article.
This comes as Kenya’s Safaricom has been considering weaning off its mobile money platform, M-PESA, for years, but is yet to do so.
Econet shareholders last Thursday voted in favour of a proposed deconsolidation of Cassava operations from the group, paving way for a separate listing on the Zimbabwe Stock Exchange (ZSE).
The company says the demerger will unlock the value of the smart technology business.
Econet is now the most valuable company on the ZSE as its market capitalisation stood at $4,3 billion as at end of trading on November 30, 2018.
“However, an analysis of Econet’s financial performance against that of its peers in the telecoms industry in Africa shows that whilst Econet is performing as well as any of these operators, its share price reflects the value of the company that is largely driven by the mobile telecommunications business but does not reflect the true value of the underlying business segments,” the company said in a circular to its shareholders dated November 8, 2018.
“The proposed demerger will enable investors to separately hold investments in businesses with different investment characteristics thereby enabling them to select investments which best suit their investment strategies and risk profiles,” read the circular.
“This will enable the exploitation of immense opportunities in Cassava’s way coupled with consolidation of existing businesses,” Equity Axis said in a comment published recently.
Meanwhile, Econet has seen 31 percent dip to its share price since mid-November to $1,7648 as of the end of trading on Friday as the market re-evaluated the company in light of the restructure. After the demerger, Cassava will house EcoCash, Econet Insurance, Econet Life and Steward Bank Limited while EWZL’s business model will pivot its focus to Telecommunications and Media (Kwesé).
Cassava’s financial statements for the year ended February, 2018, which were extracted from the group’s results, show that the technology segment’s profits made up 53 percent of the Econet’s reported $132 million profit after tax.
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