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Strive Masiyiwa struggling to sell Liquid Telecom stake

Needs the money to repay a R6.3bn loan backed by the PIC.
The Zimbabwean billionaire would rather sell part of his 66% stake than surrender shares to the PIC at a discount, according to insiders. Image: Justin Chin, Bloomberg

The coronavirus pandemic is hampering efforts by Zimbabwean billionaire Strive Masiyiwa to sell a stake in Africa’s largest fibre company.

Masiyiwa is seeking buyers for 20-34% of Liquid Telecommunications Holdings for as much as $600 million (R10 billion), according to four people with direct knowledge of the matter. He needs the money to repay a $375 million (R6.3 billion) loan that was backed by the Public Investment Corporation (PIC), they said.

Read: Zimbabwe billionaire to pay striking doctors to return to work

The PIC, which oversees the equivalent of $135 billion (R2.3 trillion), mainly on behalf of South African government workers, is demanding the issue be resolved by the end of August after granting an extension on the payment earlier this year, the people said. The loan it backed was used to fund a pay-TV venture, which failed last year because Zimbabwe’s economic woes and currency shortages meant the company couldn’t pay its suppliers.

Shares pledged to PIC

The 59-year-old tycoon had pledged shares in Liquid Telecom to the PIC as security for the loan, which had been taken out with Deutsche Bank AG.

Masiyiwa was planning to repay the debt from the proceeds of an initial public offering in Liquid Telecom, which was scrapped because of volatile equity markets, the people said.

The founder of Econet Global, which has interests in mobile-phone network operators and digital-banking operations across the continent, would rather sell part of his 66% stake in Liquid Telecom to avoid surrendering shares in the company at a discount to the PIC, one of the people said.

Talks derailed by outbreak

Masiyiwa hired the Goldman Sachs Group earlier this year to sell the stake, but talks with potential investors started unravelling after the Covid-19 outbreak intensified in March, the people said. Buyers wanted more time to assess the economic fallout of lockdowns to contain the virus on Africa’s economies, they said.

Representatives for the PIC, Goldman Sachs, Deutsche Bank and Econet declined to comment.

Read: Billionaire pleads for virus help for sanctioned Sudan, Zimbabwe

Liquid Telecom operates in 13 countries in East, Central and southern Africa with data centres in Johannesburg, Cape Town and Nairobi. It also offers cloud-based services from Microsoft, according to its website.

UK development finance institution CDC Group plc in December 2018 bought almost 10% of Liquid Telecom for $180 million (R3 billion).

© 2020 Bloomberg L.P.

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The disparity of wealth in Zimbabwe is staggering.

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