Econet Wireless has secured at least $500m from Chinese companies including China Development Bank and ZTE. The funding was announced in South Africa during Chinese President Xi Jinping’s visit.
In a statement issued by Econet Zimbabwe, it said it will get the lion’s share from the new loan facility of $500 million which Econet Global negotiated with the Chinese companies.
According to the CEO of Econet Wireless Zimbabwe Douglas Mboweni, the loan facility that had been negotiated at group level would help consolidate its market position and also introduce new service.
“With this facility we will take our investment to well over US$1.5bn. This shows our commitment to our country,” said Mboweni.
“At our group level, they have developed a lot of expertise to raise large amounts of money when we need it. It is one of our competitive advantages,” he said.
Although details of the interest rates charged were not available, analysts hope Econet will get favourable terms to reduce its finance charges. For the year ended February 28 2015, Econet paid as much as $37.1m in finance costs.
Fin24 reported that the group is currently under pressure to reduce its cost structures after its profit after tax went down to $70.2m from $119.4m because of economic factors and regulatory interventions.