Econet Wireless, Zimbabwe's largest telco, claims its share price on the local stock exchange is undervalued, limiting its capacity to raise capital to invest in operations.
Early Thursday, the operator announced that in order to safeguard shareholder value, its board had determined that the company's share price on the Zimbabwe Stock Exchange (ZSE) was "grossly undervalued" in comparison to the intrinsic value of its operations and infrastructure assets.
Tatenda Ngowe, Group company secretary, elaborated: “This under valuation has restricted the Company’s ability to raise competitively priced funding required to sustain further investment in critical network infrastructure and future technology upgrades.
“The misalignment of the Company’s market capitalisation and its intrinsic value has also resulted in the erosion of shareholder value as the company's market capitalisation does not reflect the growth in business.”
Ngowe went on to state that the company had begun evaluating various corporate measures targeted at increasing shareholder value, enhancing access to financing, and strengthening the company's long-term competitiveness.
“The outcome of the evaluation process may have a material effect on the price of the company’s securities,” she noted.
“Accordingly, shareholders and the investing public are advised to exercise caution when dealing in the company’s securities until a further announcement is made.”
The telco has over 16 million clients, with a market share of over 72 percent.
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