Zimbabwe mobile operator Telecel is set to be placed under corporate rescue to prevent the company from liquidation.
Press reports from Zimbabwe note that the operator, which is the smallest of the nation's three providers, is in desperate need of protection from going under due to its debts.
According to the state-owned Herald newspaper, a filing application to a High Court has been made by the Communication and Allied Service Workers Union of Zimbabwe secretary general David Mhambare.
The court application notes that Telecel’s assets as of the end of December last year were ZWD $1.5 billion (about $4.1 million) against total liabilities of ZWD $24bn (about $66.3m).
"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," said Mhambare. "If the solvency position of Telecel does not receive prime attention, it will inevitably go under liquidation."
A corporate rescue allows Telecel to devise a rescue plan that will benefit the company, creditors, and shareholders, added Mhambare.
Telecel only accounted for ZWD $2bn ($55.2m) or 2.6 percent of the total revenue of ZWD $76bn ($210m) across the whole telecoms sector in Zimbabwe last year.
The Herald further notes that the company hasn't spent the required investment on upgrading 4G and 5G infrastructure, while its workers have reportedly not been getting their full salaries since January 2022. Since 2015 the number of employees at Telecel has dropped from 700 to around 300, with many of these made up of inexperienced graduates, said the Herald.
The other two mobile network operators in Zimbabwe are Econet Wireless Zimbabwe (EWZ) and NetOne.
Telecel claims to serve 1.75 million mobile customers, which is significantly less than the 11.8 million customers that EWZ has, while NetOne has an estimated 4.4 million.
