A severe liquidity crunch in Zimbabwe has forced the country's largest mobile telecom firm Econet Wireless to contemplate raising US$130 million from shareholders in order to settle foreign loans.

In a circular sent to shareholders on Tuesday the telco said it plans to raise the money via a rights issue and that a shortage of foreign currency has made it difficult for the company and its subsidiaries to pay foreign loans.

"In recent months it has become clear that there is a critical shortage of foreign currency in the overseas nostro accounts of Zimbabwe's banks, and that the flow of local USD cash that those banks can export to fund their nostro accounts has diminished materially. This has made it extremely difficult for the Company and its subsidiaries to service their financial obligations to lenders and creditors outside Zimbabwe," the company adds.

The company owes several firms, including Ericsson, the Industrial Development Corporation from South Africa, the African Export-Import Bank and China Development. These creditors will be paid a total of US$128 million through this rights issue.

According to a press statement, the company will offer new shares and sell debentures at a discount of 0,5 cents to Tuesday's price of 0.30 cents.

Reimbursement

Econet Wireless last week introduced new tariffs for mobile data, but this was reversed following intervention by the country's ICT Minister Supa Mandiwanzira.

The company announced on Wednesday that it has reimbursed customers affected by its recent tariff hike. In a text message sent to subscribers, Econet said: "Dear valued customer: Following the tariff reversal, we have refunded you 43 megabytes (MB), from your purchase of data bundles done between January 11 and 12. We regret any inconvenience caused. Thank you."