EcoCash Zimbabwe : Circular to shareholders

Disclaimer

• 1. EcoCash Holdings does not accept any responsibility and will not be held liable for any failure on the part of a CSDP or broker of a Dematerialised Shareholder to notify such Shareholder of the information set out in this Abridged Circular.

• 2. The advisors are acting for the Company only and shall not be responsible to any other person for providing the protections offered to their clients.

Help

If you have any questions relating to this Document or the completion of the Form of Proxy, please email to the Group Company Secretary, Charmaine Daniels [e-mail] contact the transfer secretaries, First Transfer Secretaries on [phone] [e-mail]

APPENDED HERETO IS THE NOTICE OF EXTRAORDINARY GENERAL MEETING ("EGM") in terms whereof notice is given that an EGM of the members of EcoCash Holdings Zimbabwe Limited will be held at the Registered Office of the Company at 1906 Liberation Legacy Way, Borrowdale, Harare on Wednesday, 17 April 2024 at 1100hrs for the purposes of transacting the business indicated in the detailed Notice enclosed at the end of this Abridged Circular. Attendance at the meeting may be electronic as detailed in the attached Notice.

(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)

Lead-Financial Advisors

Transfer Secretaries

Legal Advisor

Musengi & Sigauke Legal Practitioners

Sponsoring Broker

Independent Financial AdvisorReporting Accountants & Auditors

Abridged Circular to EcoCash Holdings

Zimbabwe Limited Shareholders

This Abridged Circular relates to the proposed Scheme of Reconstruction between Econet Wireless Zimbabwe Limited (Econet) and EcoCash Holdings Zimbabwe Limited (EcoCash Holdings) involving the transfer to Econet of the Financial Technology Businesses, namely EcoCash (Private) Limited, VAYA Technologies Zimbabwe (Private) Limited, Econet Insurance (Private) Limited, Econet Life (Private) Limited, MARS Zimbabwe (Private) Limited, and Maisha Health Fund (Private) Limited, in exchange for the total consideration of ZWL 509 billion (equivalent to 521,861,057 Econet Shares) payable partly in cash and partly in Econet Treasury Shares. Econet shall pay the agreed total consideration that is equivalent to 521,861,057 Econet Shares, using 271,597,195 Treasury Shares that represent circa 50% of the purchase consideration (Shares Consideration) and the Cash Equivalent of 250,263,862 Econet shares will be calculated using the 30 Day VWAP of each Econet share to the period of date of payment (Cash Consideration).

Date of issue: Tuesday, 2 April 2024

• 1 THE TRANSACTION, ITS BACKGROUND, AND ITS RATIONALE

• 1.1 The proposed transaction is a Scheme of Reconstruction in terms of which, EcoCash Holdings will transfer to Econet, all the shares that it owns in the Financial Technology Businesses, valued at ZWL509 billion (equivalent to 521,861,057 Econet Shares) with the result that the Financial Technology Businesses shall become subsidiaries of Econet. EcoCash Holdings shall remain with Steward Bank Limited as its only subsidiary.

• 1.2 As consideration for the transfers referred to in paragraph (1.1) above, Econet shall use a combination of its Treasury Shares and Cash as Total Consideration.

• 1.3 Econet's investment in the Mobile Network Operation business over the years resulted in the creation of a Financial Technology business and an Infrastructure and Power Generation business within the Mobile Network Operation (MNO) business. In 2018, Econet made a decision to unbundle these businesses that had developed within the MNO business because the value of these businesses was not fully reflected in the Market Capitalisation of the MNO business. EcoCash Holdings was demerged from Econet under a circular dated 8 November 2018. The demerger became effective upon approval by the members at the EGM held on 29 November 2018. This led to the subsequent listing of EcoCash Holdings on the ZSE on 18 December 2018.

• 1.4 Following conclusion of the rights offers undertaken by the Company and Econet, the Company and Econet have the same controlling shareholders. More than 90% of the issued share capital of both companies is under the same control as tabulated below.

  Table 1: Shareholders of both the Company and Econet Wireless Zimbabwe Limited

  ECONET

  Shareholder name

  Number

  Econet Global Limited

  Stanbic Nominees (Private) Limited (NNR)

  Stanbic Nominees (Private) Limited TN Asset Management Nominees TN Asset Management Nominees (Underwritter)

  Econet Wireless Zimbabwe SPV Limited

  Old Mutual Life Assurance Compa-ny Of Zimbabwe Limited

  New Arx Trust (NNR)

  Austin Eco Holdings Limited - NNR Standard Chartered Nominees (Private) Limited

  Other Shareholders with Common Shareholding

  Subtotal Other

  Total

  ECOCASH HOLDINGS

  % of holdingNumber

  % of holding

• 1.5 Post the demerger in 2018, EcoCash Holdings, (the Financial Technology Businesses and Steward Bank), had been expected to attract a new set of investors whose main interest was in Financial Technologies. This was also in line with how other international mobile network operators had done including Airtel and MTN. The adverse economic conditions that have prevailed since the demerger have prevented EcoCash Holdings from attracting foreign portfolio investors. This has resulted in the Company and Econet remaining under the control of same shareholders as shown in Table 1 of paragraph 1.4 above.

• 1.6 The obtaining situation where the Company and Econet have the same controlling shareholders means that the same group of shareholders are being subjected to duplication of resources, thus eroding shareholders' value.

• 1.7 The fact that Steward Bank is a subsidiary of EcoCash Holdings has also resulted in the perception that the Financial Technology Businesses are direct competitors to local banks whereas the services are complimentary. This has caused operational and Customer Relationship Management challenges and has constrained the growth of the Financial Technology Businesses' relationship with the wider financial services market.

• 1.8 In these circumstances, it is imperative to separate Steward Bank Limited from the Financial Technology Businesses to avoid any confusion that might limit the growth of the businesses.

• 1.9 Econet proposes to acquire the Financial Technology Businesses, develop them so they may leverage synergies that include the MNO's subscriber base and delivery channels to fully develop their sustainable value creation competitiveness.

2 THE PURPOSE OF THIS ABRIDGED CIRCULAR

The purpose of this Abridged Circular is to:

2.1 Convene an Extraordinary General Meeting to seek EcoCash Holdings' Shareholder approval for the proposed transaction and other actions required on the part of EcoCash to implement the Scheme of Reconstruction; and

2.2 Provide EcoCash Holdings Shareholders with information regarding the proposed Scheme of

Reconstruction, and to advise the Shareholders of the Board's recommendation in respect of the proposed Scheme of Reconstruction in order to enable the Shareholders to make an informed decision as to whether or not they should vote in favour of the resolutions to be proposed at the

Extraordinary General Meeting.

3 EXPECTED TIMETABLE OF PRINCIPAL EVENTS

3.1 EcoCash Holdings Shareholders should take note of the dates and times set forth in the schedule below in connection with the Scheme of Reconstruction.

EVENT	DATE
Publication of the Abridged Circular in the press and the Full Circular on the Website	Tuesday, 2 April 2024
Date of Notice of EGM to consider the transaction	Tuesday, 2 April 2024
Last date for receipt of proxy forms to vote on the EGM	Monday, 15 April 2024
EGM date	Wednesday, 17 April 2024
Publication of the results of EGM	Friday, 19 April 2024

3.2 These dates are indicative only and assume that the requisite regulatory clearances have been obtained and the other Conditions to Completion have been satisfied before the date estimated for Completion. If any of the above times and/or dates change, the revised times and/or dates will be notified by announcement in the press.

DIRECTORS: Mrs S.G. Shereni (Chairperson), Mr M.L. Bennett, Dr Z. Dillon, Ms E.T. Masiyiwa, Mr C. Maswi, Mr D. Musengi, Mr H. Pemhiwa, Mr D.T. Mandivenga, Mr E. Chibi*, Mrs T. Nyemba*. * Executive. | COMPANY SECRETARY: Mrs C.R. Daniels REGISTERED OFFICE: 1906 Liberation Legacy Way, Borrowdale, Harare.

www.ecocashholdings.co.zw

• 4 REGULATORY REQUIREMENTS IN RESPECT OF THE TRANSACTION

• 4.1 The book value of the Financial Technology Businesses that EcoCash Holdings intends to transfer to Econet, amounts to ZWL325 billion. Based on EcoCash Holdings' Consolidated Statement of Financial Position as at 31 August 2023, the book value of EcoCash Holdings' Assets was ZWL931 billion. Therefore, the aggregate value of the assets to be transferred pursuant to the Scheme of Reconstruction, being less than 50% of the said book value of the assets of EcoCash Holdings, this Scheme of Reconstruction is not classified as a Major Asset Transaction on the side of EcoCash Holdings as defined in Section 226 of the Companies And Other Business Entities Act [Chapter 24:31].

• 4.2 The total consideration measured against the market capitalisation of EcoCash Holdings results in a percentage ratio of more than 30%. Accordingly, the Transaction is classified as a Category 1 Transaction in terms of paragraph 253(3) of the ZSE Listings Requirements and requires an ordinary resolution approval by Shareholders at the EGM in terms of paragraph 260(2) of the ZSE Listings Requirements.

• 4.3 Econet is a material shareholder in EcoCash Holdings (as defined in Part X of the ZSE Listings Requirements). Accordingly, the Scheme of Reconstruction agreement concluded between EcoCash Holdings and Econet constitutes a related party transaction. As a result, the proposed Scheme of Reconstruction is conditional on receipt of shareholder approval by a 50% majority excluding the votes of Econet. In addition to the exclusion of Econet, the ZSE Listings committee has directed that Econet Global Limited be excluded from voting on the basis that they view Econet Global Limited as an Associate of Econet.

• 4.4 In accordance with the provisions of paragraph 268(ii)(f) of the ZSE Listings Requirements, the EcoCash Board has obtained a fairness opinion on the related party transaction from the independent expert, which fairness opinion is set out in Annexure 1 of the full circular. Taking into consideration the terms and conditions of the related party transaction, the independent expert is of the opinion that the Scheme of Reconstruction is fair to the Shareholders of EcoCash Holdings.

• 4.5 The statement of the Board as to whether the related party transaction is fair to shareholders is included in paragraph 19 of this Abridged Circular.

• 5 THE SCHEME OF RECONSTRUCTION

• 5.1 Parties To the Transaction

  The Parties to the transaction are the Company and Econet.

• 5.1.1 Information on Econet

  Econet is the holding company of Econet Wireless (Pvt) Ltd, a Mobile Network Operator ("MNO") with over 14.9 million customers and over 80% market share of mobile internet and data traffic in the country. During its 25-year operating history, MNO has transformed from a Communications Services provider to the leading Digital Services provider in Zimbabwe, with products and services spanning the Telecommunications and Technology spaces. Recently, Econet contributed to the technological and economic development of the country by launching the country's first high-speed Fifth Generation (5G) mobile broadband technology, moving the domestic market in line with global trends. Econet's digitalisation journey continues with a focus on artificial intelligence, big data analytics, machine learning, among other areas of digital transformation.

• 5.1.2 Information on EcoCash Holdings

  EcoCash Holdings is a diversified technology group that leverages digital solutions to make a social and economic impact on the lives of all Zimbabweans. The business portfolio consists of assets in FinTech, InsurTech, On-Demand Services, e-Commerce, AgriTech, HealthTech and EduTech. EcoCash is an award-winning financial inclusion mobile payment solution that allows customers to perform simple financial transactions from mobile devices. EcoSure is a micro-insurance product that provides affordable and innovative insurance solutions directly from your mobile phone. Steward Bank offers digital banking solutions that give access to the full suite of banking services via their mobile devices. EcoCash Holdings leverages on Zimbabwe's high mobile telecommunications penetration rate and it's robust digital platforms to deliver life-changing and impactful solutions.

• 5.2 Background

• 5.2.1 The diagrammatic representation of the current ownership structure of the Company and Econet is depicted below. As tabulated in table 1 of paragraph 1.4 above, the shareholders holding 90% of the issued shares of Econet also hold 95% of the issued share capital of EcoCash Holdings. Therefore, the two companies are under the same control.

ECOCASH HOLDINGS ZIMBABWE LIMITED Shareholder name

Number

% of holding

• 5.2.2 The parties wish to reconstruct, or reorganise their ownership of the Company and Econet by undertaking a series of sequential, yet inter-dependent transactions as outlined in the following paragraphs.

• 5.3 Transfer of Financial Technology Businesses

  EcoCash Holdings owns the following Financial Technology Businesses in the percentages indicated: EcoCash (Private) Limited - 100%, VAYA Technologies Zimbabwe (Private) Limited- 100%, Econet Insurance (Private) Limited - 90%, Econet Life (Private) Limited - 85%, MARS Zimbabwe (Private) Limited - 70%, and Maisha Health Fund (Private) Limited 100%. In terms of the Scheme of Reconstruction Agreement, immediately upon the fulfilment or waiver of the Conditions precedent to the Scheme of Reconstruction set out in paragraph 7 of this Abridged Circular, EcoCash Holdings shall transfer to Econet, the Financial Technology Businesses with the result that the Financial Technology Businesses shall become subsidiaries of Econet.

• 5.4 The Banking Business to remain under EcoCash Holdings

• 5.4.1 Steward Bank Limited is a registered Commercial Bank that is currently 100% owned by EcoCash Holdings.

• 5.4.2 By virtue of its ownership of Steward Bank Limited, EcoCash Holdings is registered with the Registrar of Banks as a Bank Holding Company.

• 5.4.3 Steward Bank Limited shall remain a subsidiary of EcoCash Holdings, and EcoCash Holdings shall retain its registered status as a Bank Holding Company.

• 5.5 The Consideration to EcoCash Holdings

• 5.5.1 The Financial Technology Businesses were valued at ZWL 509 billion, which translated to 80% of the 30 Day Volume Weighted Average Market capitalization of EcoCash Holdings for the period to 16 January 2024, being the last practicable date immediately before the transaction was announced to the public. The value of the Financial Technology businesses was also equivalent to 521,861,057 Econet Shares calculated using the 30 Day Volume Weighted Average Price of each Econet share for the period to 16 January 2024, being the last practicable date immediately before the transaction was announced to the public.

• 5.5.2 As part of the Scheme of Reconstruction and following the transfer to Econet of the Financial Technology Businesses referred to above, Econet shall pay the agreed total consideration that is equivalent to 521,861,057 Econet Shares, using 271,597,195 Treasury Shares that represent circa 50% of the purchase consideration (Shares Consideration) and the Cash Equivalent of 250,263,862 Econet shares will be calculated using the 30 Day VWAP of each Econet share to the period of date of payment (Cash Consideration). Collectively, the Shares Consideration and the Cash Consideration will hereafter be referred to as the "total consideration".

• 5.5.3 The total consideration shall be payable on Completion of the transaction, that is within seven days of the Scheme of Reconstruction becoming unconditional.

• 5.5.4 The consideration in paragraph 5.5.2 shall represent the full and complete consideration, once effected in accordance with the terms of the Scheme of Reconstruction Agreement.

• 5.5.5 The total consideration for the Financial Technology Businesses has been certified as being fair and reasonable by the companies' respective independent financial advisors. EcoCash Holdings' independent financial advisors' report is appended in the Full Circular as Annexure 1.

• 5.5.6 All the consideration shares will rank pari passu in all respects with Econet's Ordinary shares currently in issue, including the right to all future dividends.

• 5.5.7 Fractional shares of less than 0.5 of a share shall be rounded down, while fractional shares above 0.5 of a share will be rounded up.

• 5.5.8 After the completion of the scheme of reconstruction, the Directors may, after considering the capital requirements of the Company, elect to declare some of the consideration as dividend.

• 6 EFFECTS OF THE PROPOSED TRANSACTION

• 6.1 EcoCash structure

  The Company's structure before and after the proposed transaction is shown below.

• 6.1.1 Before

  The following is the current Group structure.

6

EFFECTS OF THE PROPOSED TRANSACTION (CONTINUED)

6.1

EcoCash structure (continued)

6.1.2

6.5.3

Share capital structures of the Company pre and post the proposed transaction

Set out below is an analysis of the share capital of EcoCash Holdings before and after the Transaction.

The following shall be the Group structure after the Scheme of Reconstruction.

After

SUBSIDIARY	INVESTMENT/ ASSOCIATE
Steward Bank	Econet Wirelss
Limited	Zimbabwe Limited
Shareholding structure

6.2

Pre- transaction	The Transaction	Post- transaction
Company	Number	ZWL	Number	ZWL	Number	ZWL
Authorised Share Capital Ordinary Share of ZWL0.001 each	4,200,000,000	4,200,000	-	-	4,200,000,000	4,200,000
Issued share capital ordinary shares of ZWL0.001 each	4,194,797,929	4,194,798	-	-	4,194,797,929	4,194,798
Authorised but unissued ordinary shares of ZWL0.001 each	5,202,071	52,021	-	-	5,202,071	52,021

* The issued share capital shown above is after the rights offer of 1,604,220,688 ordinary shares in

September 2023. Prior to the rights issue the Company had issued share capital of 2,590,577,241 shares as at 31 August 2023.

Following the transaction, the Company's shareholding will remain the same.

6.3

Board composition

The proposed Scheme of Reconstruction is not expected to have any immediate and direct effect on the Board composition of the Company.

6.4 6.4.1

Management and employees changes

No decision has been made by the Company in relation to specific actions that will be taken as part of the business operational and administrative review. Prior to any decisions being made, detailed discussions will be held between employees and appropriate stakeholders.

6.4.2

One of the main purposes of the Scheme of Reconstruction is to eliminate the duplication of structures and costs arising from the current Group ownership structure. The rationalisation of the structure may impact on employees. Any changes that will affect employees will be done in compliance with the Labour Act (Chapter 28:01).

6.5 6.5.1

Financial effects of the proposed transaction

The table below sets out the financial effects of the proposed transaction on the pro forma reviewed consolidated half year financials of the Company for the period ended 31 August 2023. The pro forma financial statements have been prepared for illustrative purposes only and because of their pro forma nature, they may not fairly present the Company's financial position, changes in equity, results of operations or cash flows, or the effect and impact of the proposed Scheme of Reconstruction going forward.

6.5.2

The Directors of the Company are responsible for the compilation, contents and preparation of the pro forma financial statements. Their responsibility includes determining that the pro forma financial statements have been properly compiled on the basis stated, which is consistent with the accounting policies of the Company and that the pro forma adjustments are appropriate for purposes of the pro forma financial information disclosed pursuant to the ZSE Listings Requirements. The pro forma financial information is set out below:

ASSETS

Intangible assets and goodwill Property, plant and equipment Other non-current assets Financial Instruments - Long Term Financial instruments - Short Term Other current assets

Total assetsEQUITY AND LIABILITIES EQUITY

Share capital and premium

Equity attributable to equity holders of the company

Non-controlling interest

Total EquityLIABILITIES

Non-current financial instruments Financial instruments:

Short - term interest bearing debt Current Liabilities

Total LiabilitiesTotal Equity and Liabilities

240,782

689,975

930,757

930,757

320,093

240,385

17,636 602,923

1,337 234,337 5,108

198,079

126,014

27,255

69,416

18,931

(3,062) 122,952 9.3 The full text of the Resolutions is set out in the notice.

* Have been prepared on the assumption of a 50% split between cash and Econet Treasury shares.

NAV of the Company before and after the transaction

NAV	Before transaction	After transaction
Issued Share Capital*	2,590,577,241	2,590,577,241
Net Asset Value (ZWL)	240,782,000,000	769,366,119,513
Net Asset Value per share (ZWL)	92.95	296.99

* The Company had issued share capital of 2,590,577,241 shares as at 31 August 2023.

• 7 TAX IMPLICATIONS OF THE SCHEME OF RECONSTRUCTION

• 7.1 The transfer of shares held by EcoCash Holdings in the Financial Technology Businesses to Econet is a disposal of a specified asset that is normally subject to capital gains tax. Because the transfer of shares is being made between companies under the same control and in furtherance of a Scheme of Reconstruction of the Econet and EcoCash Holdings Groups of Companies, EcoCash Holdings, and Econet in terms of section 15(1)(b) of the Capital Gains Tax Act (Chapter 23:01) and the Proviso thereto, have made an election that: notwithstanding the terms and conditions of the Scheme of Reconstruction Agreement, the selling price of the Financial Technology Businesses (total consideration of ZWL 509 billion, to be paid using a combination of Econet Treasury Shares and cash) be deemed to be an amount equal to the sum of the deductions allowable to EcoCash Holdings in relation to the transfer of the Financial Technology Businesses to Econet.

• 7.2 The Commissioner General of the Zimbabwe Revenue Authority has been duly notified of the election of EcoCash Holdings and Econet.

• 8 CONDITIONS PRECEDENT TO THE TRANSACTION

  The proposed transaction is subject to:

• 8.1 The approval of the Scheme of Reconstruction by the shareholders of EcoCash Holdings in an Extraordinary General Meeting;

• 8.2 Receipt of all regulatory approvals required for the Parties to undertake the Transaction and fulfil their respective obligations thereunder. Such regulatory approvals shall specifically include:

• 8.2.1 Approval by the Insurance and Pensions Commission of the change in shareholding in Econet Insurance (Private) Limited and in Econet Life (Private) Limited; and

• 8.2.2 Approval by the National Payment Systems of the change in shareholding in EcoCash (Private) Limited.

9 SHAREHOLDER VOTING AND EXTRAORDINARY GENERAL MEETING

• 9.1 The Transaction is subject to the approval of EcoCash shareholders, excluding Econet and Econet Global Limited.

• 9.2 Set out in Annexure I of this Abridged Circular and Annexure III of the Full Circular is a notice convening an Extraordinary General Meeting, to be held on Wednesday, 17 April 2024 at 11:00hrs on 1906 Liberation Legacy Way, Borrowdale, Harare.

9.4 If passed, the Resolutions will authorise the Transaction substantially on the terms outlined herein and in the scheme of Reconstruction Agreement and subject to the fulfilment of the conditions precedent. The passing of the ordinary resolutions requires the support of a simple majority of the votes cast (whether in person or by proxy) in respect of such ordinary resolutions.

9.5 If you would like to vote on the Resolutions but cannot attend the Extraordinary General Meeting, you can appoint a proxy to exercise all or any of your rights to attend, vote and speak at the Extraordinary General Meeting by using one of the methods set out in the notes to the notice of the Extraordinary General Meeting.

10 INTEREST OF DIRECTORS

• 10.1 Save as disclosed in this Abridged Circular, none of the Directors of the Company (other than in their capacity as Directors of the Company) have any interest, direct or indirect, in the Proposed Resolutions.

• 10.2 As at the Latest Practicable Date, the interests of the Directors in the issued and paid-up capital of the Company as recorded in the Register of Directors' Shareholdings are as follows:

Name of Director	Direct Interest	Indirect Interest	Total
Mrs S G Shereni (Chairperson)	18,184	-	18,184
Dr Z Dillon (Deputy Chairperson)	-	-	-
Mr H Pemhiwa	-	-	-
Mr D T Mandivenga	1,404,417	1,404,417
Ms E T Masiyiwa	-	-	-
Mr C Maswi	-	-	-
Mr D Musengi	-	-	-
Mr E Chibi	4.358	-	4,358
Mrs T Nyemba	2,745	-	2,745

11 EXCHANGE CONTROL REGULATIONS

The Scheme of Reconstruction does not require Exchange Control Approval.

• 12 MATERIAL AGREEMENTS

  Save for the underwriter's agreement that was entered into by the Company in the recent rights offer and the agreements with regards to the transaction, no material agreements have been entered into, by any EcoCash Holdings Directors (or persons who were directors of EcoCash Holdings within the 12 (twelve) months preceding the Last Practicable Date).

• 13 MATERIAL CHANGES AND LITIGATION

• 13.1 There are no known material changes in the financial or trading position of EcoCash Holdings subsequent to the latest published results.

• 13.2 There are no material legal or arbitration proceedings against EcoCash Holdings (including any such proceedings that are pending or threatened), of which the EcoCash Holdings Directors are aware, which may, have or have had, during the 12 (twelve) months preceding the date of this Circular, a material effect on the Group's financial position which has not been previously disclosed in the public domain.

• 14 DIRECTORS' RESPONSIBILITY STATEMENT

  The EcoCash Holdings Board accepts responsibility for the information contained in this Abridged Circular; confirms that to the best of its knowledge and belief, the information contained in this Abridged Circular is true; and confirms that this Abridged Circular does not omit anything likely to affect the importance of such information.

• 15 CONSENTS

  The Lead Financial Advisor, Sponsoring Broker, Legal Advisor, Independent Reporting Accountants, Independent Financial Advisor, Transfer secretaries and the Exchange Control Advisors, whose names are included in this Abridged Circular, have consented in writing to act in the capacities stated and to their names being included in this Abridged Circular in the context in which they have been included and have not withdrawn their consents prior to the publication of this Abridged Circular.

• 16 PROSPECTS

• 16.1 Looking ahead, the Bank's trajectory will be influenced significantly by technological adoption with a digital banking expansion drive on the horizon. Mobile banking usage is expected to surge whilst investment in AI and blockchain technologies is expected to increase operational efficiencies. These innovations necessitate a parallel upscaling of systems and processes.

• 16.2 The Bank will consolidate its market position amidst a surge of fintech and alternative financial services providers. The bank's strategic blueprint includes nurturing a digital ecosystem that caters to the evolving demands of customers, whose need for digital services and personalised banking solutions continues to increase. With a well-capitalised balance sheet, strategic technological investments, and a forward-looking approach, the Bank aims to consolidate its market position and fortify its position as a resilient and progressive player in Zimbabwe's banking sector.

  ANNEXURE I: NOTICE OF EXTRAORDINARY GENERAL MEETING

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

  ZSE Alpha Code: EHZL.zw ISIN ZW0009012437

  NOTICE OF EXTRAORDINARY GENERAL MEETING

  NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of shareholders of EcoCash, will be held at 1100 hrs Zimbabwean Time, on Wednesday, 17 April 2024. The Meeting will be a virtual meeting via live webcast. You are cordially invited to attend and participate in the Meeting online via the link https:// ecocash.escrowagm.com/, the physical location of the Meeting shall be at 1906 Liberation Legacy Way, Harare. The Meeting will be held to consider and, if deemed fit, to pass, with or without modification, the following ordinary and special resolutions -

  AS ORDINARY RESOLUTION - TO APPROVE THE SCHEME OF RECONSTRUCTION TRANSACTION

  "Resolved, subject to the Regulatory Approval, that the Directors are authorised to carry out a Scheme of Reconstruction between Econet Wireless Zimbabwe Limited ("Econet") and EcoCash Holdings Zimbabwe Limited ("EcoCash Holdings") by transferring to Econet the Financial Technology Businesses namely EcoCash (Private) Limited, VAYA Technologies Zimbabwe (Private) Limited, Econet Insurance (Private) Limited, Econet Life (Private) Limited, MARS Zimbabwe (Private) Limited, and Maisha Health Fund (Private) Limited, in exchange for the total consideration of ZWL509 billion (equivalent to 521,861,057 Econet Shares) payable partly in cash and partly in Econet Treasury Shares. The number of Econet Treasury Shares shall be determined using the 30 Day Volume Weighted Average Price of Econet for the period to 16 January 2024, being the last practicable date immediately before the transaction was announced to the public. The amount of the cash component of the total consideration shall be determined using the 30 Day Volume Weighted Average Price of each Econet share for the period to the date of payment."

  AS ORDINARY RESOLUTION - TO AUTHORISE THE DIRECTORS TO SIGN ALL SUCH DOCUMENTS AND DO ALL SUCH THINGS AS MAY BE NECESSARY FOR OR INCIDENTAL TO THE IMPLEMENTATION OF THE TRANSACTION

  "Resolved that any one of the directors of the Company be and is hereby authorised to do all such things, sign all such documents and procure the doing of all such things and the signature of all such documents as may be necessary for or incidental to the implementation of the offers and the ordinary and special resolutions proposed at this general meeting."

• 17 FURTHER INFORMATION

  BY ORDER OF THE BOARD

  Your attention is drawn to the further information set out in the Full Circular that is on the ZSE and the Company's websites. EcoCash Holdings Shareholders should read the whole of the Full Circular and not just rely on the summarised information set out in this Abridged Circular.

• 18 RECOMMENDATION

  (Signed on the original)

  C. R. Daniels Company Secretary

  The Board of Directors, after due consideration of the report of the independent expert regarding the Scheme of Reconstruction, has considered the terms and conditions thereof, and is of the opinion that the terms of the Scheme of Reconstruction are fair and reasonable. The Board believes the proposed Transaction and the Resolutions to be in the best interests of EcoCash Holdings Shareholders as a whole and, accordingly, unanimously recommends that EcoCash Holdings Shareholders vote in favour of the Resolutions to be proposed at the Extraordinary General Meeting, as each member of the Board intends to do in respect of their own beneficial holdings.

• 19 DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours at the registered office of the Company, whose details can be found in the "Corporate Information and Advisors" section of this Circular, from the date of posting of this Circular until the date of the EGM, during normal business hours on Business Days:

• • Memorandum and Articles of Association of EcoCash Holdings;

• • Financial results reviewed by auditors for the half year ended 31 August 2023;

• • The Audited financial statements of EcoCash Holdings for the years ended February 2021, 2022 and 2023;

• • Notice of EGM;

• • The Written Experts' Consents;

• • The original Circular;

• • The Scheme of Reconstruction Agreement;

• • Valuation report.

Signed on Behalf of EcoCash Holdings Zimbabwe Board

2 April 2024

IMPORTANT: PLEASE READ THE NOTES BELOW

Notes:

•

Members may appoint one or more persons, whether members or not, to act in the alternative as his or her proxy to attend and vote instead of him or her. In that event, a member (whether individual or corporate) must give specific instructions as to voting, or abstentions from voting, on the proxy form, failing which it will render the proxy invalid.

•

The authority of the person signing a proxy or representing an institutional shareholder should be attached to the proxy form in the form of a Board resolution confirming that the proxy has been appointed to represent the shareholder at the Company's Extraordinary General Meeting.

•

In addition, in the case of Shares entered in the Depository Register maintained by Chengetedzai, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have Shares entered against his name in the Chengetedzai's Depository as at 48 hours before the time appointed for.

Lead-Financial Advisors

(Signed on the original)

Transfer Secretaries

Legal Advisor

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

The definitions and interpretations commencing on page 5 of this Circular apply to this cover mutatis mutandis.

ACTION REQUIRED TO BE TAKEN BY SHAREHOLDERS:

In respect of the EGM:

• 1. If you have disposed of all your shares, this circular should be handed to the purchaser of such shares or to the CSDP, broker, banker or other agent through whom such disposal was effected.

• 2. The EGM will be convened on the date and time, and in the manner set out in the Notice Convening the EGM.

• 3. Whether or not you plan to attend the EGM, PLEASE COMPLETE AND SIGN THE FORM OF PROXY and return it as soon as possible, but in any event so as to be received by no later than 1100 hours on Monday, 15 April 2024. This will enable your votes to be counted at the EGM in the event of your absence. Shareholders may participate in the EGM themselves, or through their proxies.

• 4. It is important that at the EGM as many votes as possible are cast so that there is a fair and reasonable representation of the opinion of the EcoCash Holdings shareholders. You are therefore strongly urged to sign and return your Form of Proxy as soon as possible. The completion and return of the Form of Proxy will not preclude you from attending and voting in person at the EGM.

• 5. If you are a dematerialised shareholder other than with own-name registration, then your CSDP or broker, as the case may be, should contact you to ascertain how you wish to cast your vote at the EGM, and thereafter cast your vote in accordance with your instructions. This should be done in terms of the agreement entered into between you, as a dematerialised shareholder, and the CSDP or broker. If you wish to attend the EGM in person, or wish to be represented thereat, you should inform your CSDP or broker, as the case may be, of your intention to attend and vote at the EGM or to be represented by proxy thereat in order for your CSDP or broker to issue you with the necessary letter of representation to do so. If you, as a dematerialised shareholder, have not been contacted by your CSDP or broker, it would be advisable for you to contact your CSDP or broker, as the case may be, as soon as possible and furnish them with your instructions in the manner and by the cut-off time stipulated in the aforesaid agreement between you and the CSDP or broker.

• 6. If you are in any doubt as to what action you should take with regards to the EGM, you should consult your CSDP, broker, banker, legal advisor, accountant or other professional advisor immediately.

Disclaimer

• 1. EcoCash Holdings does not accept any responsibility and will not be held liable for any failure on the part of a CSDP or broker of a Dematerialised Shareholder to notify such Shareholder of the information set out in this Circular.

• 2. The advisors are acting for the Company only and shall not be responsible to any other person for providing the protections offered to their clients.

Help

If you have any questions relating to this Document or the completion of the Form of Proxy, please email to the Group Company Secretary, Charmaine Daniels [e-mail] or contact the transfer secretaries, First Transfer Secretaries on [phone] or [e-mail]

(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)

CIRCULAR

TO ECOCASH HOLDINGS ZIMBABWE LIMITED SHAREHOLDERS

This Circular relates to the proposed Scheme of Reconstruction between Econet Wireless Zimbabwe Limited and EcoCash Holdings Zimbabwe Limited involving the transfer to Econet of the Financial Technology Businesses, namely EcoCash (Private) Limited, VAYA Technologies Zimbabwe (Private) Limited, Econet Insurance (Private) Limited, Econet Life (Private) Limited, MARS Zimbabwe (Private) Limited, and Maisha Health Fund (Private) Limited, in exchange for the total consideration of ZWL 509 billion (equivalent to 521,861,057 Econet Shares) payable partly in cash and partly in Econet Treasury Shares. Econet shall pay the agreed total consideration that is equivalent to 521,861,057 Econet Shares, using 271,597,195 Treasury Shares that represent circa 50% of the purchase consideration (Shares Consideration) and the Cash Equivalent of 250,263,862 Econet shares will be calculated using the 30 Day VWAP of each Econet share to the period of date of payment (Cash Consideration).

ENCLOSED IN THIS CIRCULAR IS:

• a) THE NOTICE OF EXTRAORDINARY GENERAL MEETING in terms whereof notice is given that an Extraordinary General Meeting of the members of EcoCash Holdings Zimbabwe Limited will be held at the Registered Office of the Company at 1906 Liberation Legacy Way, Borrowdale, Harare on Wednesday, 17 April 2024 at 1100hrs for the purposes of transacting the business indicated in the detailed Notice set out in Annexure III of this circular. Attendance at the meeting may be electronic as detailed in the attached Notice.

• b) A fairness opinion on the related party transaction from the independent expert in accordance with the provisions of paragraph 268(ii)(f) of the ZSE Listings Requirements.

Shareholders are referred to paragraph 13 of Part A of this Circular, which outlines the Directors' responsibility in regard to this Circular.

A copy of this Circular was lodged and approved by the ZSE.

Lead-Financial Advisors

Transfer Secretaries

Legal Advisor

Sponsoring Broker

Musengi & Sigauke Legal Practitioners

Date of issue: Tuesday, 2 April 2024

Copies of this Circular, which are available in English only, may be obtained from the registered office of the Company at the address set out in the "Corporate information" section of this Circular during normal business hours from Tuesday, 2 April 2024 up to and including Monday, 15 April 2024 or on the Company's website atwww.ecocashholdings.co.zw

Independent Financial Advisor

Reporting Accountants & Auditors

CORPORATE INFORMATION AND ADVISORS

TABLE OF CONTENTS

Directors	Date and place of incorporation of EcoCash Holdings Zimbabwe Limited
Independent Non-Executive Mrs S.G. Shereni (Chairperson), Mr M.L.Bennett Dr Z. Dillon Mr C. Maswi Mr D. Musengi Non - Executive Ms E.T. Masiyiwa Mr H. Pemhiwa Mr D.T. Mandivenga Executive Mr E. Chibi Mrs T. Nyemba	Incorporated in Zimbabwe on 29 March 2012 under Company Registration Number 2487/2012 Company Secretary and Registered Office Mrs C.R. Daniels 1906 Liberation Legacy Way, Borrowdale, Harare, Zimbabwe
Lead Financial Advisor	Sponsoring Brokers
TN Financial Services (Pvt) Limited 19 Collins Avenue, Chisipite Harare, Zimbabwe	Bethel Equities (Private) Limited 23 Boundary Road, Eastlea Harare, Zimbabwe
Legal Advisors	Transfer secretaries
Musengi & Sigauke Legal Practitioners Commercial, Corporate & Labour Lawyers Notaries Public, Conveyancers & Estate Administrators 7 Caithness Road, Eastlea, Harare, Zimbabwe	First Transfer Secretaries (Pvt) Ltd 1 Armagh Avenue, Eastlea Harare, Zimbabwe
Reporting Accountants and Auditors	Independent Financial Advisors
BDO Zimbabwe Chartered Accountants Kudenga House 3 Baines Avenue Harare, Zimbabwe	Nolands Chartered Accountants 7 Glenara Avenue South Cnr Samora Machel Avenue, Eastlea Harare, Zimbabwe

Note:

The above advisors have given and, as of the date of this circular, have not withdrawn their written consent to the publication of their names, addresses, logos and the statements attributed to each of them in the context in which they appear in this circular.

CORPORATE INFORMATION AND ADVISORS TABLE OF CONTENTS

ACTION REQUIRED TO BE TAKEN BY SHAREHOLDERS EXPECTED TIMETABLE OF PRINCIPAL EVENTS DEFINITIONS AND INTERPRETATIONS

PART A: LETTER TO SHAREHOLDERS

• 1 INTRODUCTION

• 2 THE PURPOSE OF THIS CIRCULAR

• 3 REGULATORY REQUIREMENTS IN RESPECT OF THE TRANSACTION

• 4 THE SCHEME OF RECONSTRUCTION

• 4.1 Parties To the Transaction

• 4.2 Background

• 4.3 Transfer of Financial Technology Businesses

  • 4.4 The Banking Business to remain under EcoCash Holdings

  • 4.5 The Issue and Allotment of Econet Shares pursuant to the Scheme of Reconstruction

• 5 EFFECTS OF THE PROPOSED TRANSACTION

  • 5.1 EcoCash structure

  • 5.2 Shareholding structure

  • 5.3 Board Composition

  • 5.4 Management and employees changes

  • 5.5 Financial effects of the proposed transaction

• 6 TAX IMPLICATIONS OF THE SCHEME OF RECONSTRUCTION

• 7 CONDITIONS PRECEDENT TO THE TRANSACTION

• 8 SHAREHOLDER VOTING AND EXTRAORDINARY GENERAL MEETING

• 9 INTEREST OF DIRECTORS

• 10 EXCHANGE CONTROL REGULATIONS

• 11 MATERIAL AGREEMENTS

• 12 MATERIAL CHANGES AND LITIGATION

• 13 DIRECTORS' RESPONSIBILITY STATEMENT

• 14 COSTS OF THE TRANSACTION AND EXPENSES

• 15 CURRENT TRADING AND PROSPECTS

• 16 FURTHER INFORMATION

• 17 RECOMMENDATION

• 18 DOCUMENTS AVAILABLE FOR INSPECTION

i

1

3

4

5

7

7

9

9

10

10

10

11

12

12 13

13

13

13

13

14

15

15

16

16

16

17

17

17

17

18

18

18

19

i

1

PART B: INFORMATION ON ECONET 20

1 HISTORY 20

2 CORPORATE STRUCTURE 20

3 OVERVIEW OF ECONET'S OPERATING SUBSIDIARIES 20

4 MANAGEMENT OF ECONET 21

5 DIRECTORS 22

PART C: INFORMATION ON ECOCASH HOLDINGS 24

1 HISTORY 24

2 CORPORATE STRUCTURE 24

3 OVERVIEW OF THE COMPANY'S OPERATING SUBSIDIARIES 25

4 MANAGEMENT OF THE COMPANY 26

5 DIRECTORS 27

ANNEXURE I: INDEPENDENT ADVISOR'S REPORT 30

ANNEXURE Il: REPORTING ACCOUNTANTS' REPORT 34

ANNEXURE IlI: NOTICE OF EXTRAORDINARY GENERAL MEETING 50

ANNEXURE IV: PROXY FORM 51

ACTION REQUIRED TO BE TAKEN BY SHAREHOLDERS

The definitions and interpretations commencing on page 5 of this Circular apply to this section headed "Action required to be taken by Shareholders"

This circular is important and requires your immediate attention. Please take careful note of the following provisions regarding the action required to be taken by shareholders. If you are in any doubt as to what action to take, please consult your broker, CSDP, banker, attorney, accountant or other professional advisor immediately.

1.

EGM

• 1.1 A Form of Proxy is attached for the convenience of holders of certificated shares and those whose shares are registered in their own name but are dematerialised, who are unable to attend the EGM, but wish to be represented thereat. In order to ensure validity, it is recommended that duly completed Forms of Proxy should be returned to the transfer secretaries, so as to reach them by no later than the time stipulated in the notice.

• 1.2 If the shareholder holds shares that are dematerialised but not held under his/her own name, then the CSDP or broker, as the case may be, should contact the shareholder in question to ascertain how they wish to cast their vote at the EGM. The CSDP or broker should thereafter cast the vote in accordance with the instructions. This should be done in terms of the agreement entered into between the shareholder whose shares are dematerialised and the CSDP or broker. If the shareholder whose shares are dematerialised wishes to attend the EGM in person, via electronic participation or wishes to be represented thereat, they should inform their CSDP or broker, as the case may be, of their intention to attend and vote at the EGM or to be represented by proxy thereat in order for their CSDP or broker to issue them with the necessary letter of representation to do so. If a shareholder whose shares are dematerialised has not been contacted by their CSDP or broker, it would be advisable for them to contact their CSDP or broker, as the case may be, as soon as possible and furnish them with their instructions in the manner, and by the cut-off time stipulated in the aforesaid agreement between the holder whose shares are dematerialised and the CSDP or broker.

• 1.3 If you are a certificated shareholder or you hold in your name, shares that are dematerialised, you may attend the EGM in person and may vote at the EGM. Alternatively, you may appoint a proxy to represent you at the EGM by completing the attached Form of Proxy and returning it to the transfer secretaries so as to reach them by no later than the recommended time.

2.

DISCLAIMER

• 2.1 All transactions arising from the provisions of this Circular shall be governed by and be subject to the laws of Zimbabwe.

• 2.2 Should any person who is not a Shareholder receive this Circular they should not and will not be entitled to acquire any Shares or otherwise act thereon.

• 2.3 This Circular and any accompanying documentation are not intended to, and do not constitute, or form part of, an offer to sell or an invitation to purchase or subscribe for any securities or a solicitation of any vote or approval in any jurisdiction in which it is unlawful to make such an offer. In those circumstances or otherwise if the distribution of this Circular and any accompanying documentation in jurisdictions outside of Zimbabwe are restricted or prohibited by the laws of such jurisdiction, this Circular and any accompanying documentation are deemed to have been sent for information purposes only and should not be copied or redistributed.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

EcoCash Holdings Shareholders should take note of the dates and times set forth in the schedule below in connection with the transaction.

EVENT	DATE
Publication of the Abridged Circular in the press and the Full Circular on the Website	Tuesday, 2 April 2024
Date of Notice of EGM to consider the transaction	Tuesday, 2 April 2024
Last date for receipt of proxy forms to vote on the EGM	Monday, 15 April 2024
EGM date	Wednesday, 17 April 2024
Publication of the results of EGM	Friday, 19 April 2024

These dates are indicative only and assume that the requisite regulatory clearances have been obtained and the other Conditions to Completion have been satisfied before the date estimated for Completion. If any of the above times and/or dates change, the revised times and/or dates will be notified by announcement in the press.

DEFINITIONS AND INTERPRETATIONS

In this Circular, unless the context indicates a contrary intention, an expression which denotes any gender includes the other genders, any reference to a natural person includes a juristic person and vice versa, the singular includes the plural and vice versa and the following expressions bear the meanings assigned to them, below:

"Board", "Board of Directors" or "Directors"	the Board of Directors of EcoCash Holdings Zimbabwe Limited;
"Broker"	A person registered as a "Broking Member" by the ZSE and licensed by the Securities Exchange Commission of Zimbabwe to trade in financial securities;
"Certificated shares"	Shares which have not been dematerialised, title to which is represented by a physical share certificate;
"Circular" or "Document"	This Circular dated, Tuesday, 2 April 2024 to Shareholders of EcoCash Holdings;
"Companies Act" or "COBE"	The Companies and Other Business Entities Act [Chapter 24:31] of Zimbabwe, as amended;
"Conditions Precedent"	The conditions precedent to the transaction set out in paragraph 7 of Part A of this Circular;
Consideration"	Approximately ZWL 509 billion (equivalent to 521,861,057 Econet Shares), to be paid to EcoCash Holdings in part Cash and in part Econet Treasury Shares;
"CSDP"	Central securities depository participant;
"Dematerialisation"	Is the process of converting physical shares into electronic format;
"Ecocash Holdings"	A public company incorporated in Zimbabwe under company registration number 2487 / 2012. The Company is listed on the ZSE under alpha code EHZL.zw ISIN ZW0009012437 and is the holding company for Ecocash (Private) Limited, Vaya Technologies Zimbabwe (Private) Limited, Econet Life (Private) Limited, Econet Insurance (Private) Limited; Maisha Health Fund (Private) Limited, MARS Zimbabwe (Private) Limited and Steward Bank Limited.
"Econet" or "EWZL"	Econet Wireless Zimbabwe Limited (registration number 7548/1998), a company duly incorporated in accordance with the laws of Zimbabwe. The Company is listed on the ZSE under alpha code ECO and ISIN ZW 000 901 212 2;
"EGM"	The Extraordinary General Meeting of shareholders of the Company which shall be held, at 1100 hrs on Wednesday, 17 April 2024 at 1906 Liberation Legacy Way, Borrowdale, Harare, amongst others, the resolutions to give effect to the transaction;
"EPS"	Earnings per share;
"EcoCash Shareholder"	A holder of EcoCash shares registered in the EcoCash Holding's share register as at the record date;
"Exchange Control Regulations"	The Exchange Control Regulations currently in force in Zimbabwe;
"Form of Proxy" or "Proxy Form"	The form, accompanying this document, which provides for EcoCash's shareholders to appoint a proxy to attend the EGM and vote on their behalf;
"Lead Financial Advisor" or "TNFS"	TN Financial Services (Private) Limited, a company incorporated in Zimbabwe under registration 5548/97 and that is duly registered with the Securities and Exchange Commission of Zimbabwe to conduct financial advisory services;
"Member"	EcoCash's shareholder;
"MOA" or "M&A"	the Memorandum and Articles of Association of EcoCash Holdings Zimbabwe Limited;
"Ordinary Shares"	The ordinary shares of EcoCash Holdings with a nominal value of ZWL0.001 each in the share capital of EcoCash Holdings;

"RBZ"	Reserve Bank of Zimbabwe;
"Registrar"	The Zimbabwe Registrar of Companies;
"Sponsoring Broker"	Sponsoring broker on the proposed transaction, namely Bethel Equities (Private) Limited;
"the Bank"	Steward Bank Limited;
"Transfer Secretaries" or "FTS")	Transfer secretaries to EcoCash Holdings, namely First Transfer Secretaries (Private) Limited;
"Transaction"	The proposed Scheme of Reconstruction between Econet Wireless Zimbabwe Limited (Econet) and EcoCash Holdings Zimbabwe Limited (EcoCash Holdings) involving the transfer to Econet of the Financial Technology Businesses, namely EcoCash (Private) Limited, VAYA Technologies Zimbabwe (Private) Limited, Econet Insurance (Private) Limited, Econet Life (Private) Limited, MARS Zimbabwe (Private) Limited, and Maisha Health Fund (Private) Limited, in exchange for the total consideration of ZWL 509 billion (equivalent to 521,861,057 Econet Shares) payable partly in cash and partly in Econet Treasury Shares. Econet shall pay the agreed total consideration that is equivalent to 521,861,057 Econet Shares, using 271,597,195 Treasury Shares that represent circa 50% of the purchase consideration (Shares Consideration) and the Cash Equivalent of 250,263,862 Econet shares will be calculated using the 30 Day VWAP of each Econet share to the period of date of payment (Cash Consideration);
"USD" or "US$"	The United States Dollar, the lawful currency of the United States of America, being a legal currency in Zimbabwe as well;
"VWAP"	Volume weighted average trading price;
"Zimbabwe"	The Republic of Zimbabwe;
"ZSE"	Zimbabwe Stock Exchange Limited;
"ZWL"	The Zimbabwe dollar, the lawful currency of Zimbabwe.

PART A: LETTER TO SHAREHOLDERS

(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)

Directors:	Address:
- Independent Non-Executive: Mrs S.G. Shereni (Chairperson), Mr	1906 Liberation Legacy Way,
M.L.Bennett, Dr Z. Dillon, Mr C. Maswi, Mr D. Musengi.	Borrowdale,
- Non - Executive: Ms E.T. Masiyiwa, Mr H. Pemhiwa, Mr D.T. Mandivenga	Harare
- Executive: Mr E. Chibi, Mrs T. Nyemba
Tuesday, 2 April 2024
Dear Shareholder
CIRCULAR TO ECOCASH HOLDINGS ZIMBABWE LIMITED SHAREHOLDERS

1

INTRODUCTION

• 1.1 The proposed transaction is a Scheme of Reconstruction in terms of which, EcoCash Holdings will transfer to Econet, all the shares that it owns in the Financial Technology Businesses, valued at ZWL509 billion (equivalent to 521,861,057 Econet Shares) with the result that the Financial Technology Businesses shall become subsidiaries of Econet. EcoCash Holdings shall remain with Steward Bank Limited as its only subsidiary.

• 1.2 As consideration for the transfers referred to in paragraph (1.1) above, Econet shall use a combination of its Treasury Shares and Cash as Total Consideration.

• 1.3 Econet's investment in the Mobile Network Operation business over the years resulted in the creation of a Financial Technology Business and an Infrastructure and Power Generation business within the Mobile Network Operation (MNO) business. In 2018, Econet made a decision to unbundle these businesses that had developed within the MNO business because the value of these businesses was not fully reflected in the Market Capitalisation of the MNO business. EcoCash Holdings was demerged from Econet under a circular dated 8 November 2018. The demerger became effective upon approval by the members at the EGM held on 29 November 2018. This led to the subsequent listing of EcoCash Holdings on the ZSE on 18 December 2018.

• 1.4 Following conclusion of the rights offers undertaken by the Company and Econet, the Company and Econet have the same controlling shareholders. More than 90% of the issued share capital of both companies is under the same control as tabulated below.

Table 1: Shareholders of both the Company and Econet

2

THE PURPOSE OF THIS CIRCULAR

Shareholder name

ECONETNumber% of holding

Econet Global Limited

Stanbic Nominees (Private) Limited (NNR)

Stanbic Nominees (Private) Limited TN Asset Management Nominees TN Asset Management Nominees (Underwritter)

Econet Wireless Zimbabwe Spv Limited Old Mutual Life Assurance Company of Zimbabwe Limited

New Arx Trust (NNR)

Austin Eco Holdings Limited - NNR Standard Chartered Nominees (Private) Limited

Other Shareholders With Common Shareholding

Subtotal Other

Total

ECOCASH HOLDINGSNumber% of holding

• 1.5 Post the demerger in 2018, EcoCash Holdings, (the Financial Technology Businesses and Steward Bank), had been expected to attract a new set of investors whose main interest was in Financial Technologies. This was also in line with how other international mobile network operators had done including Airtel and MTN. The adverse economic conditions that have prevailed since the demerger have prevented EcoCash Holdings from attracting foreign portfolio investors. This has resulted in the Company and Econet remaining under the control of same shareholders as shown in Table 1 of paragraph 1.4 above.

• 1.6 The obtaining situation where the Company and Econet have the same controlling shareholders means that the same group of shareholders are being subjected to duplication of resources, thus eroding shareholders' value.

• 1.7 The fact that Steward Bank is a subsidiary of EcoCash Holdings has also resulted in the perception that the Financial Technology Businesses are direct competitors to local banks whereas the services are complimentary. This has caused operational and Customer Relationship Management challenges and has constrained the growth of the Financial Technology Businesses' relationship with the wider financial services market.

• 1.8 In these circumstances, it is imperative to separate Steward Bank Limited from the Financial Technology Businesses to avoid any confusion that might limit the growth of the businesses.

• 1.9 Econet proposes to acquire the Financial Technology Businesses, develop them so they may leverage synergies that include the MNO's subscriber base and delivery channels to fully develop their sustainable value creation competitiveness.

The purpose of this Circular is to:

• 2.1 convene an Extraordinary General Meeting to seek EcoCash Holdings' Shareholder approval for the proposed transaction and other actions required on the part of EcoCash to implement the Scheme of Reconstruction; and

• 2.2 provide EcoCash Shareholders with information regarding the proposed Scheme of Reconstruction, and to advise the Shareholders of the Board's recommendation in respect of the proposed Scheme of Reconstruction in order to enable the Shareholders to make an informed decision as to whether or not they should vote in favour of the resolutions to be proposed at the Extraordinary General Meeting.

3

REGULATORY REQUIREMENTS IN RESPECT OF THE TRANSACTION

• 3.1 The book value of the Financial Technology Businesses that EcoCash Holdings intends to transfer to Econet amounts to ZWL325 billion. Based on EcoCash Holdings' Consolidated Statement of Financial Position as at 31 August 2023, the Book Value of EcoCash Holdings' Assets was ZWL931 billion. Therefore, the aggregate value of the assets to be transferred pursuant to the Scheme of Reconstruction, being less than 50% of the said book value of the assets of EcoCash Holdings, this Scheme of Reconstruction is not classified as a Major Asset Transaction on the side of EcoCash Holdings as defined in Section 226 of the COBE.

• 3.2 The total consideration measured against the market capitalisation of EcoCash Holdings results in a percentage ratio of more than 30%. Accordingly, the Transaction is classified as a Category 1 Transaction in terms of paragraph 253(3) of the ZSE Listings Requirements and requires an ordinary resolution approval by Shareholders at the EGM in terms of paragraph 260(2) of the ZSE Listings Requirements.

• 3.3 Econet is a material shareholder in EcoCash Holdings (as defined in Part X of the ZSE Listings Requirements). Accordingly, the Scheme of Reconstruction agreement concluded between EcoCash Holdings and Econet constitutes a related party transaction. As a result, the proposed Scheme of Reconstruction is conditional on receipt of shareholder approval by a 50% majority excluding the votes of Econet. In addition to the exclusion of Econet, the ZSE Listings committee has directed that Econet Global Limited be excluded from voting on the basis that they view Econet Global Limited as an Associate of Econet.

• 3.4 In accordance with the provisions of paragraph 268(ii)(f) of the ZSE Listings Requirements, the EcoCash Board has obtained a fairness opinion on the related party transaction from the Independent Financial Advisor, which fairness opinion is set out in Annexure I of this circular. Taking into consideration the terms and conditions of the related party transaction, the independent expert is of the opinion that the Scheme of Reconstruction is fair to the Shareholders of EcoCash Holdings.

• 3.5 The statement of the Board as to whether the related party transaction is fair to shareholders is included in paragraph 17 of this Chairperson's report.