EcoCash Zimbabwe : Cautionary Announcement

SECOND CAUTIONARY ANNOUNCEMENT RELATING TO THE APPROXIMATELY US$30.3 MILLION

RENOUNCEABLE RIGHTS OFFER OF ECOCASH HOLDINGS ZIMBABWE LIMITED SHARES.

(Incorporated in Zimbabwe on 29 March 2012 under Company Registration Number 2487/2012)

ZSE Alpha Code: EHZL.zw ISIN ZW0009012437

(EcoCash Holdings or the Company)

1 INTRODUCTION

1.1 This Second Cautionary Announcement contains the details of the proposed Rights Offer referred to in our initial Cautionary Announcement that was published on the 5th of April 2023.

2 PURPOSE OF THE RIGHTS OFFER

2.1 The purpose of the Rights Offer is to raise approximately USD30.3 million required to redeem the Debentures in the Capital of EcoCash Holdings Zimbabwe Limited ("the Company") that have a Maturity Date of 30 April 2023.

3 RATIONALE OF THE PROPOSED RIGHTS OFFER

1. There are competing needs for the foreign currency component of the revenues generated by the Company with the highest priority being given to the financing of the upgrade and maintenance of the digital platforms in use by the Company.
2. The Company is not able to secure foreign currency for purposes of redeeming the Debentures from the auction. Therefore, the only available option is to raise the required foreign currency from members through the Rights Offer.
3. If the proposed Rights Offer is not made, the Company will be faced with the risk of defaulting on its Debenture maturity obligations. This will damage the Company's prospects of accessing future loan facilities.

4 TERMS AND CONDITIONS OF THE PROPOSED RIGHTS OFFER

The following is a summary of the principal terms and conditions of the Rights Issue.

Issue Price:	The Rights Offer Price will be based on a 30-day
	volume weighted average traded price ("VWAP") of
	the shares of the Company as at the last practicable
	date converted to US Dollars using the official rate,
	less a discount to cushion members from exchange
	losses arising on the conversion of Zimbabwe Dollars
	to United States Dollars upon any future disposal of
	the shares due to the shortage of Foreign Currency.
	The shortage of foreign currency in Zimbabwe has
	resulted in a parallel market for United States Dollars
	that trades at a premium to the official Exchange Rate
	as acknowledged by the Reserve Bank of Zimbabwe
	on page 16 of its Monetary Policy Statement dated 2
	February 2023. The final discount will be determined
	at the time of launching the offer based on market
	conditions at that time.
Amount to be raised:	US$ 30,319,771
Purpose of the Rights	The estimated net proceeds from the Rights Issue
Offer:	will be used to redeem the Debentures in terms
	of the Circular under which the Debentures were
	created and in terms of the Debenture Trust Deed.
Opening date of Rights	To be fixed in relation to the timing of the regulatory
Offer:	approvals to which the proposed Rights Offer will be
	conditional.
Closing date of Rights	To be fixed in terms of the Listing Rules and in
offer:	relation to the timing of the regulatory approvals to
	which the proposed Rights Offer will be conditional.
Currency to be used	Shareholders are being given the option to subscribe
to subscribe for the	for the Rights Offer Shares in United States Dollars
Rights Offer Shares:	or using the Econet Wireless Zimbabwe Limited
	Debentures that they hold. The price of the
	Debentures at the redemption date is US$0.06252
	per each Debenture held in terms of the Debenture
	Register as of the record date.
Ranking of the shares:	Once issued, the New EcoCash Holdings Shares
	will rank pari passu in all respects with the existing
	issued Shares.
Governing Law:	Laws of Zimbabwe

5 UNDERTAKINGS AND UNDERWRITING

1. The major shareholders have committed to following their rights, leaving an amount of approximately USD18 million to be raised from the other shareholders.
2. To provide certainty regarding the outcome of the Rights Offer, TN Asset Management (Private) Limited has entered into an Underwriting Agreement with the Company ("Underwriting Agreement") to underwrite the USD18 million.

6 CONDITIONS PRECEDENT

The implementation of the Rights Offer is subject to the following conditions precedent being fulfilled:

1. Approval of the Circular to Shareholders referred by the Listing Committee of the ZSE;
2. Passing of the necessary Resolutions by EcoCash Holdings Shareholders required to implement the Rights Offer;
3. Approval by the ZSE of the listing of the Rights Issue Shares; and
4. EcoCash Holdings obtaining necessary Exchange Control approvals from the Reserve Bank of Zimbabwe.

7 POSTING OF CIRCULAR

1. The Directors are currently engaging the Regulators to get approvals to publish the Circular and to convene an Extraordinary General Meeting of Members to ap- prove the proposed Rights Offer.
2. The Circular incorporating the Notice of the Extraordinary General Meeting and setting out full details of the Rights Offer, will be posted to EcoCash Holdings shareholders of record in due course.
3. The form of instructions in respect of the Letters of Allocation to be attached to the Rights Offer Circular shall include the number of new ordinary shares to which Shareholders are entitled to subscribe, based on the ordinary shares already owned by Shareholders and a detailed explanation of the options available to Shareholders.
4. Shareholders will also be notified in the press about the important dates and times relating to the Rights Offer.

8 MATURITY OF DEBENTURES BEFORE CLOSURE OF THE RIGHTS OFFER

8.1 Any Debentures that will mature prior to the closure of the Rights Offer may be presented to the Company for settlement by the Underwriter. The Debenture Holders who choose to wait for the closure of the Rights Offer shall be paid interest at the rate that applies to the Debentures from the Maturity Date to the date of payment.

By Order of the Board

Mrs. C R Daniels

Group Company Secretary

27 April 2023

Lead-Financial Advisors

Transfer Secretaries	Legal Advisor	Sponsoring Broker	Independent	Reporting	Exchange	Underwriter
			Financial Advisor	Accountants & Auditors	Control Advisor

DIRECTORS:

Mrs S.G. Shereni (Chairperson), Mr M.L. Bennett, Dr Z. Dillon, Miss E.T. Masiyiwa, Mr C. Maswi, Mr D. Musengi, Mr H. Pemhiwa, Mr D.T. Mandivenga, Mr E. Chibi*, Mrs T. Nyemba*.

• Executive.