Old Mutual mulls Africom exit

HARARE - Financial group Old Mutual Zimbabwe (OMZ) is reportedly mulling a pull-out from Kwanayi Kashangura’s Africom Holdings Limited, businessdaily can reveal.

This comes on the back of serious boardroom squabbles, which rocked the telecommunications company last year – resulting in alleged institutional investor disgruntlement and plans to exit the group.

Lillian Mbaiwa, OMZ’s group marketing and media executive, would neither confirm nor deny the development.
“We can confirm that Old Mutual holds a total of 22, 76 percent shareholding in Africom. We are, however, unable to comment on specific investments,” she said in e-mailed responses to businessdaily.

On the other hand, Kashangura’s office spurned numerous opportunities for comment, with the Africom founder himself failing to respond to e-mailed questions or inquiries by the time of going to print Wednesday.

According to sources, the parties (OMZ and Africom) have been “haggling” over an US0,18 to US0,32 price per share in lieu of a sale by the deep-pocketed portfolio investor.

While Jonas Mushosho’s group has underwritten Africom’s $35 million rights issue, it snapped a significant chunk of the Harare-based telecoms player’s shares at “a discounted US0,18 per scrip”, which it now wants to offload at nearly double the price.

Apart from OMZ, the sources said, fellow listed financial group Afre Corporation Limited (Afre) and James Matiza’s National Social Security Authority (NSSA) are also reportedly considering an exit.

However, group executives at both NSSA and Afre have denied the moves.

Farayi Mangwende, head of Afre’s corporate affairs, said her risk management group “invested in both listed and non-listed companies operating in sectors that have evidence of current and future growth potential.”

“Normal due process is always followed with regards to monitoring and reviewing performance of these investments on a regular basis to ensure that the return objective and capital preservation mandates are met using its stipulated criteria,” she said, adding the Borrowdale-based firm and group subsidiary First Mutual Life held a combined 10 percent of Africom.

Matiza, on the one hand, said NSSA was not considering exit from Africom.

He not only said NSSA had invested some $4,5 million into Africom Continental (AC)’s fibre optic project, but they had “confidence in the business” as a whole.

As things stand, the authority has a five percent stake in the holding company and 44 percent in AC.

Following the intense boardroom rancour, Kashangura temporarily exited with quite a number of directors including banker Farai Rwodzi and his business ally Simba Mangwende resigning from the company’s board after they were charged with “espionage”.

Their relations soured after an Ernst & Young forensic audit, which exposed quite a number of alleged irregularities and corporate governance issues.

Although the Africom founder lost grip of the group – established nearly 15 years ago – Kashangura has somehow clawed back to the company’s helm.

He had opened up the group to institutional investors to further strengthen its capital base, bankroll its massive expansions and ambitions in a sector. - Eric Chiriga, Business Editor

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