Econet is the largest counter on the board by market capitalization and revenue at $4.3 billion market cap and an estimated annual revenue of $1.2 billion using a straight line projection on the half year numbers. At an Extraordinary General Meeting (EGM) in Harare on Thursday, Econet Wireless Zimbabwe shareholders voted in favour of a proposed deconsolidation of Cassava operations from the Econet group, paving way for a separate listing on the local stock market, the ZSE.
The company operates a 3 tier model dubbed TMT which represent the traditional Telecoms business, emerging Media and expanding Technology businesses. It is against this background that Econet decided to spin-off its later business, which is secured firmly in position on mobile money and fin-tech through Ecocash and Steward bank.
Ecocash has been world fastest growing mobile money service and its revenue has doubled its income in 4 years. Steward is now Zimbabwe’s largest bank by customer base and non funded income having evolved into a digital bank in under 5 years. In a value proposition to shareholders through a circular ahead of the EGM Econet said an analysis of its peers in the region reflect undervaluation of its own business.
Econet believes this is as a result of a standard telco company valuation model which does not factor the value of other services with such as mobile money, media and technology businesses as is the case with Econet. The company thus sees value accretion through demerging of the smartech business and shareholders were in agreement. Some of the entities under Cassava and their respective shareholding is as follows Ecocash 100% owned, Econet Life 85% owned, Steward Bank 100% owned and Econet Insurance 90% owned.