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Zimbabwe’s third largest Mobile phone operator after Econet Wireless Zimbabwe and NetOne, Telecel Zimbabwe, has posted a negative equity of $22,5 billion dollars.The country’s smallest mobile operator faces $24 billion liabilities after posting a negative Equity of $22,5 Billion With $1,5 Billion Assets Against Liabilities Of $24 Billion.
David Mhambare, Communication and Allied Service Workers Union of Zimbabwe secretary general, yesterday filed a High Court Application where he revealed Telecel is insolvent facing liquidation if no rescue attempts are taken immediately.
Revelations made by Mhambare are that, “Telecel’s liabilities outweigh its assets, as of December 31, 2021, with $1,5 billion in assets against total liabilities of $24 billion, pointing to negative equity of $22,5 billion,” says the court application.
“The…conditions indicate the existence of a material uncertainty that may cast significant doubt on the company’s ability to continue operating as a going concern,” says Mhambare.
“If the solvency position of Telecel does not receive prime attention, it will inevitably go under liquidation.”
Mhambare added that corporate rescue is ideal in the circumstances as it affords Telecel an opportunity to “rehabilitate, obtain a moratorium from the execution of judgments by litigants, develop and implement a sound corporate rescue plan that secures the rights of all creditors and preserve value to the shareholders by ultimately avoiding liquidation of the company which otherwise has prospects of resuscitation.”
Mambare also said, Telecel is in the financial doldrums after accounting for only $2 billion or 2,6 percent of the total revenue of $76 billion for the whole telecoms sector in Zimbabwe last year.
The situation is so dire the smallest of zimbabwe’s three mobile operators is now looking forward to a corporate rescue, and rescuing from possible bankruptcy , caused by financial distress.
Aurifin Capital was nominated the corporate rescue manager with Knowledge Hofisi set for the job.
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