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Econet to pays US$27 million to buy TN Bank

by Business Reporter
22 January 2013 | 3907 Views
ECONET Wireless Zimbabwe will pay out about US$26,5 million worth or the cash equivalent to acquire the remaining 55 percent ordinary shareholding in TN Bank Limited.




Econet and TN did not reveal the transaction value when they announced the deal late last year, but a circular to shareholders puts the offer price at US15,91c per TN Bank share.

The remaining single biggest shareholder and TN Bank founder Mr Tawanda Nyambirai will take a combination of cash and shares in Econet after agreeing to sell his stake in the bank.

Econet Wireless is offering of US15,91c per TN Bank share or one Econet Wireless share for 28,79 TN Bank share for shareholders that will opt for scrip.

The mobile phone operator will acquire 55 percent of the 30 301 253 348 issued and fully paid ordinary shares, worth US$26,5 million at the price of US15,91c per share.

Econet already owned 45 percent of the shares following its acquisition of 62 311 140 TN Bank ordinary shares after investing US$20 million in the bank.

Econet quickly sought the separate listing of TN Bank on the Zimbabwe Stock Exchange, after acquiring a swaying 45 percent interest. TN Bank was part of TN Holdings Limited.

After assuming strategic control of the bank, Econet has now decided to acquire the remaining 55 percent to align the bank's operations with the telecoms firm's interest. The acquisition of the full control of the bank will also enable the bank to meet the Reserve Bank of Zimbabwe's new minimum capital threshold of US$100 million without difficulty, considering Econet Wireless' financial muscle.

More importantly, assuming total control of TN Bank will give Econet the financial platform of a registered financial institution it requires to leverage the growth of its fast growing mobile money transfer/banking service, EcoCash.

EcoCash now handles in excess of US$70 million worth of transactions on a daily basis, making the availability of a dedicated fully incorporated bank a priority.

EcoCash has set TN Bank apart from other commercial banks. It is the administrator of the trust account where EcoCash, with more than 1,7 million subscribers, holds its funds.

The rapidly growing mobile money service is now used to pay for goods and services in addition to money transfer. Shareholders with a combined 30 percent of TN Bank, made up of trusts belonging to founder Mr Nyambirai, have already consented to taking up new shares in Econet Wireless.

Econet Wireless Zimbabwe (Pvt) Limited is the holding company of businesses involved in cellular operations, provision of internet access and transaction processing in Zimbabwe. It controls Econet Wireless Limited, a cellular network operator with over 7 million subscribers, according to latest data.

Econet owns the entire stake in Pentamed Investments (Pvt) Limited, which holds 69 percent of Mutare Bottling Company.

It controls financial solutions provider Transaction Payment Solutions, provider of switching, point of sale and value added services, which exploits convergence of banking, information technology and telecommunications and owns EW Capital Holdings Limited, as its investment arm for carefully selected investments.

Econet Wireless also has Data Control Systems as an associate.
The firm, which trades as Liquid Telecom, is a leading internet access provider in Zimbabwe specialising in data services, voice and Interprotocol services.

Econet TN Bank

Source: TH

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