Strive Masiyiwa to sell part of his shares in Liquid Telecom to repay Kwese debt

Strive Masiyiwa is seeking to sell between 20 – 34% of his shares in Liquid Telecom for as much as $600 million to repay a $375-million loan incurred in the setup of Kwese TV.

Kwese flopped because of the economic crisis in Zimbabwe which resulted in the company’s inability to meet its obligations to its vendors. It started with a lot of promise about 2 years ago but it ended up in administration over $130 million debt.

The loan was backed by Public Investment Corporation (PIC), a South African based asset Manager and it is demanding the issue be resolved by the end of August after granting an extension on the payment earlier this year.

Mr Masiyiwa had pledged the Liquid Telecom shares to the PIC as security for the loan, which had been taken out with Deutsche Bank AG.

He had initially planned to repay the debt from the proceeds of an initial public offering in Liquid Telecom, which was scrapped because of volatile equity markets

According to Bloomberg, Masiyiwa hired Goldman Sachs Group Inc. earlier this year to sell the stake, but talks with potential investors started unraveling after the Covid-19 outbreak intensified in March. It added that buyers wanted more time to assess the economic fallout of lockdowns to contain the virus on Africa’s economies.

However it is reported that Mr Masiyiwa would rather sell part of his 66% stake in Liquid Telecom to avoid surrendering shares in the company at a discount to the PIC