Business / Companies
Brainworks withdraws $20m Telecel offer after rights offer close
27 Mar 2015 at 03:27hrs | Views
Brainworks Capital Management has withdrawn the offer that it had made to Empowerment Corporation to purchase its 40 percent shareholding in Telecel Zimbabwe three days after closing on its fully underwritten rights offer.
Brainworks intended to raise $26,500,000 for the Telecel deal. As of now its not clear as to whether they managed to raise the $26 million or the rights offer flopped.
A fully underwritten renounceable rights offer by Brainworks Capital amounting to approximately $35,000,000 consisting of 350,000,845 Ordinary Shares at a subscription price of $0.10 per Ordinary Share closed on Monday 23 March and in a letter dated March 19, 2015 to EC's company secretary Brainworks said it had become subject of court processes and a sustained public onslaught on its business.
Brainworks cites protracted shareholder wrangles which have not provided a clear decision on the transaction as the reason they have withdrawn the offer. It is not yet clear as to how much was raised through the rights issue.
Brainworks had sought to acquire the shareholding for $20 million but failure to get a concrete agreement for EC shareholders saw the investment management company withdrawing its offer for the stake.
The transaction was affected by an urgent court application with respect to the sale of the Telecel shares, dispute in terms of the valuation of the company and the authority of certain shareholders representatives, chief among them business persons Mr James Makamba and Mrs Jane Mutasa.
The Brainworks Capital Rights Offer circular did not talk about some of the glaring risks associated with the Telecel deal which was a concern to some market analysts. It was not clear as to how Brainworks planned to fund the $200 million mobile licence as it was only raising $26 million to purchase Telecel assets only.
Brainworks intended to raise $26,500,000 for the Telecel deal. As of now its not clear as to whether they managed to raise the $26 million or the rights offer flopped.
A fully underwritten renounceable rights offer by Brainworks Capital amounting to approximately $35,000,000 consisting of 350,000,845 Ordinary Shares at a subscription price of $0.10 per Ordinary Share closed on Monday 23 March and in a letter dated March 19, 2015 to EC's company secretary Brainworks said it had become subject of court processes and a sustained public onslaught on its business.
Brainworks cites protracted shareholder wrangles which have not provided a clear decision on the transaction as the reason they have withdrawn the offer. It is not yet clear as to how much was raised through the rights issue.
Brainworks had sought to acquire the shareholding for $20 million but failure to get a concrete agreement for EC shareholders saw the investment management company withdrawing its offer for the stake.
The transaction was affected by an urgent court application with respect to the sale of the Telecel shares, dispute in terms of the valuation of the company and the authority of certain shareholders representatives, chief among them business persons Mr James Makamba and Mrs Jane Mutasa.
The Brainworks Capital Rights Offer circular did not talk about some of the glaring risks associated with the Telecel deal which was a concern to some market analysts. It was not clear as to how Brainworks planned to fund the $200 million mobile licence as it was only raising $26 million to purchase Telecel assets only.
Source - Additional reporting by Herald
