Econet Zim gets US$300 mln of $500 mln parent loan from ZTE
ECONET Wireless has added to its huge debt stock after announcing yesterday it will get US$300 million of the US$500 million loan its parent company, Econet Global, has negotiated with China Development Bank and ZTE Corporation.
Zimbabwe’s biggest mobile telecommunications company by subscribers and value paid a staggering US$21 million towards meeting finance costs in latest reporting period.
While Econet continues to make significant profits in a market where it dominates and has well over half the 14,2 million population on its expansive network, its revenues and profitability have plateaued with stagnation in voice revenue.
However, the mobile phone network operator has come up with a cocktail of innovative products including mobile money transfer, mobile insurance and data services in a bid to counter the group’s tapering revenue and profits decline.
Profit for the half year to August dipped 52 percent to US$323 million while group’s revenue took a 17 percent knock to US$323 million.
As at the end of the 2015 full year, Econet Wireless reported the group’s total interest bearing loan at $165,7 million.
But Econet Wireless Zimbabwe chief executive Douglas Mboweni said the loan facility negotiated at group level would help the telecoms giant consolidate its market position, as well as to introduce new products and services.
The country’s biggest telecommunications operator said it will continue to invest heavily in expanding its services, despite having already suck in US$1,2 billion to develop its network.
“With this investment, we will take our investment to well over US$1,5 billion. This shows our commitment to our country,” Mboweni said in a statement released late yesterday.
He said the loan had been negotiated at group level because that is where the expertise is for this magnitude of funding. “At our group, they have developed a lot of expertise to raise large amounts of money when we need it.”
Follow us on Twitter on @FingazLive and on Facebook – The Financial Gazette