Masiyiwa to sell 30% of his shares in Liquid Telecom to pay off Kwese debts

Farai Mudzingwa

31 July 2020

Strive Masiyiwa is reportedly having trouble selling off 20-34% of his stake in Liquid Telecom because of the Coronavirus pandemic. The stake he is looking to sell is valued at around US$600 million.

Part of the proceeds from the sale of shares will be used to pay Kwese TV’s US$375 million administration bill. Masiyiwa was given a deadline by Public Investment Corp (PIC) which was backing the loan used in Econet Media’s Kwese TV project.

In return for the loan, Masiyiwa is said to have pledged shares in Liquid Telecom to PIC as security for the loan. Earlier this year Masiwa intended to finance repayment of this debt from proceeds of an initial public offering in Liquid Telecom but that did not materialise because of COVID-19 which gave investors cold feet.

Sources who spoke to Bloomberg said Masiyiwa prefers to sell part of his 66% stake in Liquid Telecom to avoid letting go the shares at a discount. Given that the the sale of the shares has been complicated by COVID-19 it’s hard to see how that changes by the end of August.

When you also consider that Masiyiwa is selling whilst under pressure to settle another debt if a deal is struck in the near future one would have reason to believe the Econet Wireless executive chairman would not have as much leverage.

Kwese TV had a torrid time after launch – failing to acquire subscribers fast enough to pay for the content they had acquired. This led to failure by Econet Media to settle licence fees for content they had already aired (e.g The 2018 World Cup and NBA).

Media

9 comments

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The Principal

31 July 2020 18:54

I respect this guy but he let me down big time on the Kwese thing, it was dumb.

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1. Stevie T
  
  1 August 2020 21:31
  
  It wasnt his fault it was ZBC they realized that they were losing customers to KWESE and decided to shut it down
  
  Reply
  1. The Principal
    
    2 August 2020 13:11
    
    The investment was dumb, period. Kwese had launched in several other African Countries, besides Zimbabwe. Is the ZBC in other countries Kwese had launched?? There is no way a good investment can fail entirely due challenges in one country. They were simply going to cease operations in Zimbabwe and remain live in other countries.
    
    Reply
Luke

31 July 2020 21:05

Kwese will make large profit

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Good Innings

1 August 2020 16:50

Its a shame kwese didn’t work out, but it was a good try. There aren’t many moonshot projects in zim, i hope it wont be the last.

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Arieni Ramakgapola

2 August 2020 00:05

I respect Strive he is a great business man but kwese TV was a very unwise investment decision leave that game for Rupert Murdock the DStv tycoon who dominates the globe.

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1. Shagun Kapoor
  
  11 December 2023 22:23
  
  That’s is not sure Strive is not shy
  
  Reply
Billion Eagles

2 August 2020 10:13

It was not dump investment he simply went way too ahead of time . They overlooked the cost of data in Zimbabwe because to be honest I was a great followers of Kwese iflix but data was bad as in Zimbabwe I love his excellent dreams with a good guy in charge it might have still worked

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TateW

2 August 2020 17:07

”Staying in your lane” is the GOSPEL he is always talking about. Strive Masiyiwa always gives an example of Warren Buffet not investing in tech because he says he doesn’t understand it. Invest in what you know and understand. Phenomenal guy in telecomms, and hope he learns to take his own advice cause MEDIA is a different ball-game.

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