Following the announcement of a shutdown, Econet Group has put up its media subsidiary, Econet Media Limited, for sale. This was revealed by Bloomberg after an advert by the financial firm in charge, Ernst & Young, emerged.
Econet Media, which offers free-to-air TV, and digital distribution of media content, was recently said goodbye to its users. Prior to the shutdown, the company had earlier placed Kwesé under strict administration following a $130m debt, with Ernst & Young put in charge of the process.
But soon afterwards, it announced a complete shutdown of its various media services – Kwesé TV, Kwesé Sports and Kwesé Play, which was apparently connected with the economic crisis of Zimbabwe. As the company stated, the shortage of foreign currency, meant that Econet found it difficult exiting money out of Zimbabwe to pay suppliers. This had an impact that led to an eventual shutdown of its media services.
The Ernst & Young Ltd. newspaper advert on Friday shows that it will oversee offers for all or part of the company’s shareholdings in businesses across its markets – Botswana, South Africa, Zimbabwe, Lesotho, Zambia, Nigeria, Rwanda, Tanzania, Uganda, Malawi, Mauritius, Ghana, Kenya and Dubai.
This shows that the reasons for the shutdown and eventual sale may be beyond the difficulty in Zimbabwe and may point to the fact that the company is in more debt/troubles than it announced.
Unfortunately, media is not the only service the telecoms giant has had trouble running. Econet has a huge pile of businesses that it appears to have had a hard time with besides its core product, telecoms.
This includes ecommerce platform, Tengai; Insurance product, Ecolife; online Supermart, Ecoshopper; business/enterprise product, Econet VOIP; Solar energy solutions, Econet Energy; a dedicated business wallet; and Water purification service, Seldon Investments.
To this extent, the eventual fate of Kwesé does not come as a shock.
However with it being put up for sale, it quite unclear who could be interested in buying over the company’s shareholding. This is because of the current trend of potential viewers ‘cutting the cord’ and streaming content from VoD platforms.
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