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Source: Pennies for your shares: Telecel payouts plunge to half a dollar – herald

Business Reporter

SHAREHOLDERS in struggling mobile network operator Telecel Zimbabwe have been offered nominal payouts as low as US$0,50 to give up their equity as part of a turnaround strategy expected to bring the company back to profitability within 24 months.

This is contained in a rescue plan prepared by the company’s corporate rescue practitioners, Messrs Kundai Tibugare and Bulisa Mbano, of Grant Thornton Zimbabwe.

The turnaround plan envisages Telecel incurring a loss of US$4,4 million in the first year, but quickly returning to a profit of US$5,4 million in the second year, US$7,6 million in the third year, US$14,8 million in the fourth year and US$24,3 million by the fifth year.

A planned revamp of the network will rely on Fourth Generation (4G)/LTE deployment, leveraging expanded coverage, spectrum access, subscriber growth, higher network capacity and strong average revenue per user metrics.

According to the restructuring proposal, majority shareholder Mutapa Investment Fund (MIF) — which has a 60 percent stake — has been offered US$1.

Empowerment Corporation, which holds the balance of 40 percent, will receive US$0,50 as full and final settlement for its equity.

The practitioners said the amounts offered to the existing shareholders shall constitute full and final settlement of their equity contributions to the company.

Despite wiping out historical equity value, the rescue plan acknowledges past funding support to keep Zimbabwe’s smallest mobile telecommunications firm afloat.

“Notwithstanding the foregoing and as a recognition of the support provided by the existing shareholders in sustaining the company through funding support, the plan provides that shareholders with exposure in Telecel Zimbabwe shall receive a distribution of US7c in the dollar in respect of all shareholder-related loans in which Mutapa Investment Fund was the only participating shareholder,” the practitioners said.

Under these terms, shareholder-related loans amounting to US$97,7 million will be compromised (reduced compensation) at US7c per dollar, resulting in a cash settlement of US$6,8 million to Zimbabwe’s sovereign wealth fund on a net dividend basis, subject to direct deductions to relevant stakeholders to ensure an uninterrupted takeover. Prospective investor Augustus Capital has proposed allocating a 15 percent strategic equity interest in the restructured company to MIF.

Addressing the conditions surrounding this stake, the proposal outlines strict performance guidelines.

“Should Mutapa Investment Fund fail to provide satisfactory assurance of its ability to fulfil the agreed obligations, the shareholding shall be deemed to constitute a cash-out by Augustus Capital,” said the practitioners.

“In such an event, Mutapa Investment Fund shall be required to acquire the shares at a mutually agreed valuation.”

The proposal establishes structured payout terms across all creditor classes as at November 11, 2025. Huawei’s secured claim of US$10,7 million — for network equipment supplied between 2010 and 2012 that has depreciated over time — will be compromised at 40 cents in the dollar, rounding out to a payout of US$4,3 million.

The practitioners highlighted that this offer represents an improvement of US14,66c in the dollar over the estimated recovery under a liquidation scenario.

Huawei’s unsecured balance of US$4 million will also be compromised at US40c in every dollar, resulting in a settlement amount of US$1,6 million payable soon after the adoption of the plan.

Statutory liabilities totalling US$691 014 owed to statutory bodies — including the Zimbabwe Revenue Authority (ZIMRA), the National Social Security Authority (NSSA) and other pension funds — and three months of outstanding employee remuneration will be paid at 100 percent.

Concurrent trade debt amounting to US$9,8 million will be settled at US40c in every dollar, totalling US$4 million.

Historical licence fee arrears of US$40,2 million owed to the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) will be compromised at US7c in every dollar (US$2,8 million).

The balance of US$54,8 million for future licence years will be repaid in full over eight years with a one-year grace period.

A concurrent claim by another equipment supplier, ZTE, of US$8,5 million will be compromised at US40c in every dollar (US$3,4 million).

Legacy employee debt amounting to US$257 403 will be settled in full.

Addressing the future of the company’s workforce, the practitioners noted “Augustus Capital’s intention to retain all 248 employees of Telecel Zimbabwe”.

However, acknowledging potential future operational changes, the plan details additional risk management measures.

“Whilst Augustus Capital intends to retain all employees, it has set aside US$1 million to cover any unforeseen retrenchment costs that may arise as a result of future restructuring,” the document says.

Additionally, “new employees will be strategically recruited on sustainable contracts and subject to interviews by Augustus Capital”.

Telecel Zimbabwe was officially placed under voluntary corporate rescue on October 27, 2025, following a resolution passed by its board of directors.

The court-sanctioned rehabilitation process, managed by Grant Thornton, was initiated to protect the country’s third-largest mobile telephone operator from legal proceedings and liquidation while securing fresh investor capital to rebuild network infrastructure and stabilise operations.

The adoption of Telecel Zimbabwe’s corporate rescue plan is subject to strict statutory voting thresholds and multi-agency regulatory approvals before Augustus Capital can formally execute its acquisition.

Under the turnaround terms, the plan must pass dual-majority voting criteria across both creditors and shareholders.

The plan should be approved by at least 50 percent — being the majority in number — of the various classes of creditors present and voting either in person or by proxy and the requisite majority should represent not less than 75 percent in value of the votes exercisable by the creditors present.

Since the proposed restructuring alters the rights of existing equity holders, the approval terms extend to the company’s security holders on identical conditions.

Once approved by both creditors and members, the plan becomes universally binding.

The practitioners noted that any foreign creditor disbursements remain subject to exchange control regulations, statutory tax deductions and bank charges.

Finalisation of the investment transaction relies on completing full legal, commercial and tax due diligence by Augustus Capital, followed by the signing of an official implementation agreement and a share purchase and share subscription agreement.

The agreement will detail the immediate sharing of technical and marketing expertise, sync corporate rescue objectives with handover-takeover processes, and establish payment modalities for legacy debt.

Further conditions include the transfer of immediate bid funds, reconciliation of post-commencement financing and satisfaction of specific class-creditor offer terms.

In what reflects its deep troubles, Telecel Zimbabwe’s active subscriptions plummeted to a marginal 303 284 users by the end of 2025, driven by continuous subscriber loss, shrinking market share and frozen infrastructure upgrades. This represents a monumental collapse from over 1,6 million active subscribers recorded during its peak period.

Telecel’s market share has also sunk to a fraction of 1 percent of the total mobile subscriber and data market, losing an additional 0.13 percentage points in the recent reporting periods.

The post Pennies for your shares: Telecel payouts plunge to half a dollar  appeared first on Zimbabwe Situation.

Source: Chitungwiza goes for seven years without functional sewer plant – herald

Remember Deketeke-Municipal Correspondent

THE Chitungwiza Town Council has operated without a functioning sewer treatment plant for more than seven years, a situation that has fuelled frequent sewer bursts, exposed thousands of residents to serious public health risks and led to the discharge of untreated sewage into Hunyani River.

The findings are contained in the Auditor-General’s 2025 Report, which says the municipality has failed to provide an effective sewerage system as required by the Urban Councils Act, with ageing infrastructure continuing to deteriorate due to years of underinvestment.

According to the report, dated December 31, 2023, the municipality’s sewer treatment plant has remained non-functional for more than five years, while deteriorating sewer infrastructure has resulted in repeated sewer bursts in several parts of the town.

“The municipality’s sewer treatment plant has been non-functional for more than five years,” reads the report.

“The deteriorated condition of the sewer infrastructure resulted in frequent sewer bursts that have been occurring in both residential and commercial areas.”

The Auditor-General said the situation contravenes the Urban Councils Act, which requires local authorities to provide, maintain and effectively manage sewerage and sanitation systems. The audit attributes the crisis to years of inadequate capital investment.

“The condition was due to lack of capital investment in sewer system rehabilitation, maintenance and infrastructure upgrading,” reads the report.

Responding to the findings, Chitungwiza Municipality acknowledged the challenges but said rehabilitation works were underway. Management said a contractor was already on site rehabilitating 4,7 kilometres of sewer outfall lines, while council teams were carrying out additional repairs using donated pipe material covering 9,88 kilometres.

“The municipality is rehabilitating a total of 4,7km of sewer outfall lines, with the contractor currently on site.

“In-house interventions are also being undertaken using donated pipe material covering 9,88km,” management said.

Council officials, however, admitted that restoring the sewer treatment plant remains beyond the municipality’s financial capacity. “Municipal council had engaged an investor for a public-private partnership arrangement that did not materialise.

“Due to the magnitude of the project, the council is unable to fund that project and is in the process of looking for a partner to do the project,” management said.

In an interview, Chitungwiza Town Council spokesperson Mr Tafadzwa Kachiko confirmed that the town has now gone for more than seven years without a functioning sewer treatment plant.

“The Zengeza Sewage Treatment Works comprises a conventional treatment plant and a Biological Nutrient Removal (BNR) plant. At present, both treatment plants are non-operational,” he said.

He said the municipality was seeking investment partners to rehabilitate both the water supply and sewerage infrastructure.

“The municipality is actively seeking investment partners to support the rehabilitation of both the water supply and sewerage infrastructure. The effective operation of the sewerage system is closely linked to the availability of adequate water supplies, as sufficient water flows are essential for efficient wastewater conveyance and treatment,” he said.

The deteriorating sewer system has also resulted in untreated sewage being discharged into Hunyani River, one of the major tributaries feeding Lake Chivero, Harare’s principal source of raw water.

The post Chitungwiza goes for seven years without functional sewer plant  appeared first on Zimbabwe Situation.

Source: Zupco audit reveals same revenue target for 12km and 720km routes – herald

Trust Freddy-Zimpapers Correspondent

A RECENT value-for-money audit conducted by the Auditor-General’s Office on the Zimbabwe United Passenger Company (ZUPCO) made a startling discovery where the parastatal had similar revenue targets for buses plying the 12-kilometre Kuwadzana route and the 720-kilometre trip to Victoria Falls, among many others.

It is believed that the use of blanket revenue targets across urban, peri-urban, rural and long-distance routes made it impossible for the State-owned transporter to accurately assess route performance or align revenue expectations with operating costs.

According to the recently released report, in August 2022, all buses operating from the Belvedere depot were assigned the same monthly revenue target of ZWL$18 000, equivalent to about US$36 at the Reserve Bank of Zimbabwe’s average exchange rate of US$1:ZWL$495.

“As a result, a bus going to Kuwadzana had a similar set revenue target with buses going to Victoria Falls, Muzarabani and Domboshava,” the report states.

Auditors said the uniform targets failed to take into account significant differences in route distances, passenger volumes and operating costs, weakening ZUPCO’s ability to effectively monitor profitability.  The report also found that revenue targets were not adjusted to reflect rapid currency depreciation.

At the Belvedere depot, for example, the ZWL$18 000 target introduced in January 2022, when the exchange rate stood at US$1:ZWL$111, remained unchanged by August 2022 despite the Zimbabwe dollar weakening to US$1:ZWL$493.

“This had an effect of ZUPCO failing to meet operational costs,” the Auditor-General said.

“Overall revenue performance was weak.” On average, buses achieved only 76 percent of their revenue targets during the audit period.

The highest attainment was 86 percent in 2020, while the lowest was 71 percent in 2019.

By the period between January and October 30, 2024, average attainment had fallen further to just 54 percent.

The audit also highlighted inconsistencies in revenue planning, with some depots failing to set targets altogether.

No revenue targets were set at the Belvedere depot for June 2024, at the Willowvale depot for February and May 2024, or at the Khami depot for November 2019 and November 2023.

“Non-setting of revenue targets may result in ZUPCO failing to monitor revenue performance,” the report said.

While some depots significantly underperformed, others posted extraordinarily high revenue achievement figures, exposing flaws in the target-setting system.

Ten sampled buses at the Belvedere depot recorded revenue attainment of only 22 percent and 25 percent in April and May 2020, respectively.

Conversely, Belvedere exceeded its August 2022 target by 1 356 percent, Willowvale surpassed its January 2023 target by 592 percent, Kelvin exceeded its December 2022 target by 642 percent, while the Masvingo depot achieved 1 133 percent of its February 2024 target.

Across the sampled depots, average over-achievement stood at 500 percent, suggesting that many of the targets were unrealistically low.

The Auditor-General concluded that ZUPCO’s failure to tailor revenue targets to individual routes and regularly review them in line with inflation and exchange rate movements significantly weakened performance monitoring and contributed to the company’s inability to cover operational costs.

In its response included in the audit report, ZUPCO management attributed poor revenue performance to factors beyond its control, including Government-directed fare reductions, the loss of exclusive loading bays after the Covid-19 lockdowns and delayed payments by organisations hiring its buses.

Management said the company was required to charge fares prescribed by the Ministry of Local Government and Public Works, noting that these were occasionally reduced through Government directives.

It cited a circular issued on May 20, 2019, which cut urban bus fares by 50 percent, arguing that the decision made it extremely difficult to achieve revenue targets.

The company also said that following the lifting of Covid-19 travel restrictions, commuter ranks became disorganised after ZUPCO lost its exclusive loading bays, adding that it still does not have designated urban loading spaces.

Management further revealed that buses were frequently deployed for private hires by external organisations for an average of four days at a time.

However, delayed payments by these clients disrupted cash flows and further undermined the company’s ability to meet its revenue targets.

The post Zupco audit reveals same revenue target for 12km and 720km routes appeared first on Zimbabwe Situation.

Source: Zupco audit reveals same revenue target for 12km and 720km routes – herald

Trust Freddy-Zimpapers Correspondent

A RECENT value-for-money audit conducted by the Auditor-General’s Office on the Zimbabwe United Passenger Company (ZUPCO) made a startling discovery where the parastatal had similar revenue targets for buses plying the 12-kilometre Kuwadzana route and the 720-kilometre trip to Victoria Falls, among many others.

It is believed that the use of blanket revenue targets across urban, peri-urban, rural and long-distance routes made it impossible for the State-owned transporter to accurately assess route performance or align revenue expectations with operating costs.

According to the recently released report, in August 2022, all buses operating from the Belvedere depot were assigned the same monthly revenue target of ZWL$18 000, equivalent to about US$36 at the Reserve Bank of Zimbabwe’s average exchange rate of US$1:ZWL$495.

“As a result, a bus going to Kuwadzana had a similar set revenue target with buses going to Victoria Falls, Muzarabani and Domboshava,” the report states.

Auditors said the uniform targets failed to take into account significant differences in route distances, passenger volumes and operating costs, weakening ZUPCO’s ability to effectively monitor profitability.  The report also found that revenue targets were not adjusted to reflect rapid currency depreciation.

At the Belvedere depot, for example, the ZWL$18 000 target introduced in January 2022, when the exchange rate stood at US$1:ZWL$111, remained unchanged by August 2022 despite the Zimbabwe dollar weakening to US$1:ZWL$493.

“This had an effect of ZUPCO failing to meet operational costs,” the Auditor-General said.

“Overall revenue performance was weak.” On average, buses achieved only 76 percent of their revenue targets during the audit period.

The highest attainment was 86 percent in 2020, while the lowest was 71 percent in 2019.

By the period between January and October 30, 2024, average attainment had fallen further to just 54 percent.

The audit also highlighted inconsistencies in revenue planning, with some depots failing to set targets altogether.

No revenue targets were set at the Belvedere depot for June 2024, at the Willowvale depot for February and May 2024, or at the Khami depot for November 2019 and November 2023.

“Non-setting of revenue targets may result in ZUPCO failing to monitor revenue performance,” the report said.

While some depots significantly underperformed, others posted extraordinarily high revenue achievement figures, exposing flaws in the target-setting system.

Ten sampled buses at the Belvedere depot recorded revenue attainment of only 22 percent and 25 percent in April and May 2020, respectively.

Conversely, Belvedere exceeded its August 2022 target by 1 356 percent, Willowvale surpassed its January 2023 target by 592 percent, Kelvin exceeded its December 2022 target by 642 percent, while the Masvingo depot achieved 1 133 percent of its February 2024 target.

Across the sampled depots, average over-achievement stood at 500 percent, suggesting that many of the targets were unrealistically low.

The Auditor-General concluded that ZUPCO’s failure to tailor revenue targets to individual routes and regularly review them in line with inflation and exchange rate movements significantly weakened performance monitoring and contributed to the company’s inability to cover operational costs.

In its response included in the audit report, ZUPCO management attributed poor revenue performance to factors beyond its control, including Government-directed fare reductions, the loss of exclusive loading bays after the Covid-19 lockdowns and delayed payments by organisations hiring its buses.

Management said the company was required to charge fares prescribed by the Ministry of Local Government and Public Works, noting that these were occasionally reduced through Government directives.

It cited a circular issued on May 20, 2019, which cut urban bus fares by 50 percent, arguing that the decision made it extremely difficult to achieve revenue targets.

The company also said that following the lifting of Covid-19 travel restrictions, commuter ranks became disorganised after ZUPCO lost its exclusive loading bays, adding that it still does not have designated urban loading spaces.

Management further revealed that buses were frequently deployed for private hires by external organisations for an average of four days at a time.

However, delayed payments by these clients disrupted cash flows and further undermined the company’s ability to meet its revenue targets.

The post Zupco audit reveals same revenue target for 12km and 720km routes appeared first on Zimbabwe Situation.

Source: Govt to expand ZiG-only taxes – herald

Harare Bureau
THE Government is set to expand the range of taxes payable exclusively in Zimbabwe Gold (ZiG) as it steps up efforts to increase demand for the local currency and promote its wider use, it has been learnt.
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube is expected to unveil the new policy measures when he presents the 2026 Mid-Term Budget and Economic Review Statement this week.
The reforms are intended to deepen the use of ZiG across the economy by requiring more tax obligations to be settled in the local currency.
The authorities view taxes as one of the most effective instruments for creating sustained demand for the local unit because they represent recurring financial obligations for businesses and individuals.
By increasing the number of taxes payable exclusively in ZiG, Treasury expects to boost circulation of the currency while reducing reliance on the United States dollar in domestic transactions.
Presently, most major taxes administered by the Zimbabwe Revenue Authority (Zimra) can be paid in United States dollars, where the underlying income, transaction or pricing is denominated in foreign currency.
Under Zimbabwe’s multi-currency framework, taxpayers generally settle their obligations in the currency in which their income or revenue is earned.
In an interview with our Harare Bureau, Prof Ncube confirmed that Treasury was broadening the range of taxes payable in the local currency as part of an ongoing programme to strengthen demand for ZiG.
“Oh yes, going forward, this is an ongoing programme,” he said.
“Treasury will expand the range of taxes that will be paid in ZiG in order to increase the demand for the local currency. We need to make sure we do that. It (ZiG) is now very stable, and we believe that in order to support the circulation of the currency within the economy, the demand ought to go up.”
While the Government has confirmed that the scope of ZiG-only tax payments will be expanded, it is currently unclear whether the measures will cover Pay As You Earn (PAYE), Value-Added Tax (VAT), customs duties, corporate income tax, capital gains tax or other statutory levies.
The latest measures form part of the Government’s broader road map towards restoring the local currency as the sole medium for domestic transactions.
Monetary authorities have identified eight key conditions that must be met before Zimbabwe can safely transition to a mono-currency regime.
These are durable macro-economic stability characterised by single-digit inflation, adequate foreign currency reserves equivalent to between three and six months of import cover, exchange rate stability, efficient foreign exchange management, increased demand for the local currency, financial sector stability, an efficient National Payments System and strong coordination between fiscal and monetary policy without monetisation of the Budget.
According to monetary authorities, six of the eight benchmarks have already been achieved, leaving only two outstanding — increasing demand for the local currency and building foreign currency reserves to the internationally recommended threshold.
The planned tax reforms come as confidence in ZiG continues to strengthen.
Reserve Bank of Zimbabwe data shows that the share of ZiG transactions processed through the National Payments System has risen from about 26 percent when the currency was introduced in April 2024 to between 35 and 40 percent of all electronic transactions.
The authorities have also reported declining incidences of discriminatory pricing and growing acceptance of the local currency by businesses across the economy.
The Government, Prof Ncube added, would continue introducing complementary measures to reinforce public confidence in the currency.
“Of course, we have to build other measures to build confidence.
“Sometimes it’s about confidence and we believe that confidence is going up if you put it every day around the currency, but we will also, in addition to that, be expanding use of the ZiG going forward,” he said.
Treasury has already rolled out several measures designed to stimulate demand for ZiG.
These include requiring companies to settle 50 percent of their Quarterly Payment Dates (QPDs) in the local currency, shifting payments to public sector suppliers into ZiG and reducing the
Intermediated Money Transfer Tax (IMTT) on ZiG transactions from two percent to 1,5 percent while maintaining the two percent rate on United States dollar transactions.
The Government is also increasing the availability of physical cash to support wider use of the currency.
Prof Ncube said ZiG had remained stable since its introduction and that higher denomination banknotes would soon be released to improve cash circulation and accessibility.
“I think if you just look at it now, since 2024 really, the ZiG has been stable and also the demand of the currency has been quite strong and stable, but also we are introducing other notes which will be introduced into the market to increase the circulation and access to the cash aspect of the currency,” he said.
President Mnangagwa was recently presented with the new ZiG100 and ZiG200 banknotes by Reserve Bank of Zimbabwe Governor Dr John Mushayavanhu.
The new denominations are expected to complement the ZiG10, ZiG20 and ZiG50 notes already in circulation and support increasing use of cash in the local currency.
At the same time, the Reserve Bank is strengthening the reserve backing of ZiG ahead of an eventual mono-currency transition.
The central bank plans to increase reserve cover to the equivalent of two months of imports by year-end, moving closer to the international benchmark of between three and six months required to underpin a stable domestic currency.
Gold holdings, which constitute about 40 percent of the country’s reserves, have increased from 1,5 tonnes when ZiG was introduced in April 2024 to 4,5 tonnes last month.
The Government ultimately plans to build the country’s gold reserves to about 11 tonnes before transitioning to a mono-currency system.
In a recent interview with The Sunday Mail, Dr Mushayavanhu indicated that broadening of public sector goods and services in local currency would increase demand for ZiG.
“As the largest economic agent, Government’s demand and supply have an economy-wide impact, transcending all sectors and markets. As a result, the recalibration of Government taxes and payments will steer the rest of the economy towards the increased use of ZiG,” he said.

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