History is likely to repeat itself as Telecel Zimbabwe will soon be under pressure from government’s 100% take over, over failure to pay its licences, after violating their payment plan.
Telecel is currently behind its obligation with $25 million of the $137.5 million, a figure which will likely rise as we close the year to the next trading period as the company continues to see red.
In 2013, Telecel Zimbabwe got the 20-year licence of $137.5million, of 2G,3G&4G in 2013. The license fee is payable in installments up to December 2020, however payments for the year 2017 and June 2018 are overdue.
Both government and EC must pay, but government will likely squeeze their shareholder EC and force them out through dilution as they can easily write off the owing licence. EC would be forced to put their payment on the table.
Information reaching us suggested that this could be an opportunity for government to a capital call for all shareholders or may easily absorb the load which will be a major blow to EC being led by James Makamba and Jane Mtasa.
Econet has already paid in full their licence while we could not independently confirm the NetOne figures, it seems Telecel will be in the spotlight as the internal rift between government and EC continues to widen.
Telecel Zimbabwe has consistently paid $12million in the past payment plan and it now seems inevitable for them to default as the company continues to be under financial distress.
James Makamba had earlier on tried to sell his stake to Manyere for $4million to settle his dues but this was disrupted as government refused to honour the deal as a major stakeholder. Manyere was hoping what he was owed was supposed to be converted to equity.