Econet Leaves the ZSE: The Big Split Explained

The Problem: The Price Tag is All Wrong

Let’s be honest: Econet feels like it’s selling a Ferrari for the price of a Toyota Corolla. They have been complaining for a while that the ZSE just doesn’t get their worth.

The main issue? The local currency (ZiG). Trying to put a fair price on thousands of massive cell towers, Tesla batteries, and real estate in a volatile currency is a headache. Econet says they are trading at a huge discount compared to their friends in other countries like MTN and Airtel. Basically staying on the ZSE is making them look cheaper than they actually are.

There is an old proverb that says when a hyena wants to eat its children, it first accuses them of smelling like goats. Econet has been saying the ZSE "smells like goats" for a while now, and now they are finally taking action.

The Solution: The Great Breakup

To fix this, Econet is pulling a "conscious uncoupling." They are splitting the company into two separate pieces:

• The Service Business (The Software): This is the Econet you know, the one selling you airtime and data. This part is leaving the ZSE and going private. That means no more buying or selling these shares on the public market.
• The Infrastructure Business (The Hardware): They have created a new company called Econet InfraCo. This company gets custody of all the expensive physical toys: the towers, the buildings, and the power generators.

Chasing the Dollars in Victoria Falls

So, where is the hardware going? The new InfraCo is heading straight to the Victoria Falls Stock Exchange (VFEX).

Why? Because the VFEX speaks the universal language of money: US Dollars.

By moving the towers to a USD exchange, Econet protects its most valuable gear from inflation and currency madness. It also makes the company look much more attractive to foreign investors who usually run for the hills when they see local currency risks.

The Shareholder’s Dilemma: Stick or Twist?

If you own Econet shares, you are probably scratching your head right now. You have a tough choice to make:

1. Stay with the Ship: You can keep your shares in the main mobile company. But be warned, once it goes private, you are locked in. You won’t be able to wake up and sell your shares on an app to pay for an emergency. The liquidity (your ability to get cash quickly) will basically vanish.
2. Take the Exit Offer: Econet is offering to buy you out. If you take this, you will likely get a mix of cash and shares in the new, shiny, USD listed InfraCo.

A Punch in the Gut for the ZSE

While this might be a smart survival move for Econet, it is a disaster for the Zimbabwe Stock Exchange.

Econet is a giant. It makes up about a quarter of the entire value of the ZSE. When a fish that big jumps out of the pond, the water level drops fast. Analysts are worried that without Econet, the local exchange will shrink and trading will dry up.

The Bottom Line

Econet is doing what it needs to do to survive. By moving its "hard" assets to a "hard" currency market, they are shielding themselves from our economic storms.

For us ordinary folks, this hopefully means they can afford to keep the network running smoothly. But for you investors? The "hyena" has separated the goats. You now have to decide if you want to hold onto a private local company or pivot to a US Dollar infrastructure play. Choose wisely!