Thanks very much Tinashe. I definitely share your view that InfraCo is overvalued. I usually only glance at the fair and reasonable but this time I read every word. “The valuation of US$1.0 billion for Econet InfraCo is supported by the aggressive growth in the Power Services segment…”. Why aren’t some indicative forward looking figures shared beyond 28 Feb 2026? What about capex requirements to support this growth - that could be huge.
What about segment splits in InfraCo….nothing provided and has a significant bearing on valuation. I would’ve expected more information to substantiate the $1bn valuation.
No quantified dividend policy for InfraCo.
I also did not find any guidance on Capital Gains Tax if you stay in Econet (1% of selling moves to 20% of gain, after delisting, for post Feb 2019 shares if I’m not mistaken). This is a material consideration for shareholders/ omission from the circular (I stand to be corrected). Same thing for withholding tax on dividends 10% on listed shares (for individuals etc) moves to 15%.
You’ve presented 2 options. The 3rd option is to vote against the delisting and the transaction as a whole I guess.
Debt in Zim already attracts 12%+ interest. Equity should have a higher cost/rate of return. No way an 11.79% WACC makes sense.
Thanks very much Tinashe. I definitely share your view that InfraCo is overvalued. I usually only glance at the fair and reasonable but this time I read every word. “The valuation of US$1.0 billion for Econet InfraCo is supported by the aggressive growth in the Power Services segment…”. Why aren’t some indicative forward looking figures shared beyond 28 Feb 2026? What about capex requirements to support this growth - that could be huge.
What about segment splits in InfraCo….nothing provided and has a significant bearing on valuation. I would’ve expected more information to substantiate the $1bn valuation.
No quantified dividend policy for InfraCo.
I also did not find any guidance on Capital Gains Tax if you stay in Econet (1% of selling moves to 20% of gain, after delisting, for post Feb 2019 shares if I’m not mistaken). This is a material consideration for shareholders/ omission from the circular (I stand to be corrected). Same thing for withholding tax on dividends 10% on listed shares (for individuals etc) moves to 15%.
You’ve presented 2 options. The 3rd option is to vote against the delisting and the transaction as a whole I guess.
Thanks, Vernon. Very true on the 3rd Option, perhaps it's worth presenting that in a follow-up.
The tax topic, I think, is a big one. I need to do some more research on that.
Very interesting analysis. I have an old text on “Cost of Capital-Estimation and Applications”
I would like to take a short position on Infraco, as soon as it goes live on VFEX, lol.
Don't think that is possible, unfortunately. I don't think there a waay to short in Zim. Otherwise I can see why one would want to short it!
Sign me up too! I’ll pledge other shares to cover the short.
This is fantastic analysis and unique insight into a complex deal
Thanks
Thank you Tinashe for the insights.
Thanks!
Very informative. Thank you, Tinashe
Thanks!
Very good piece, so clear.