Telecel Zimbabwe’s shareholding structure under review

Zimbabwe’s Telecel is coming under increasing pressure to comply with legislation that requires that at least 60 per cent of the shareholders are local residents.

Currently the company is 60 per cent-owned by Orascom Telecom Holdings, which is itself now a subsidiary of Russia’s VimpelCom.

The Russian company has been previously reported to be looking to sell three small African networks, in Burundi, the Central African Republic, and Zimbabwe.

The sale of the Zimbabwean stake could resolve the foreign shareholder compliance, but it also reduces the likely value of the company as the pool of potential buyers is reduced to just Zimbabwean investors.

Zimbabwe’s Indigenisation and Economic Empowerment Act aims to transfer at least 51 per cent control of all foreign-owned firms, including mines and banks, to locals.

The remaining 40 per cent stake in Telecel is owned by a holding company controlled by president Robert Mugabe’s nephew, Leo Mugabe.