Edgars seek shareholders’ nod to delist from ZSE

CLOUDINE MATOLA

Edgars Stores Limited, a publicly traded apparel retailer, will seek approval from shareholders to delist from the Zimbabwe Stock Exchange (ZSE) and migrate to the Victoria Falls Stock Exchange (VFEX) at a crucial extraordinary meeting   set for March 22,2024, Business Times can report.

According to the circular to shareholders, the meeting will take place virtually via electronic means.

IH Advisory are the financial advisors, while IH Securities and Gill, Godlonton & Gerrans are the sponsoring brokers and legal advisors respectively. CorpServe serves as the transfer secretaries.

Edgars’ board of directors decided last month to stop trading the company’s shares on the ZSE with the goal of listing on the VFEX, which is why the meeting is taking place.

Since then, the ZSE has given permission to remove Edgars’ shares from the bourse’s list.

Delisting, however, is contingent upon Edgars receiving all necessary regulatory clearances, including a letter of good standing from the ZSE.

If the plan is approved by the shareholders at the EGM, Business Times can report that the last day that Edgars’ shares will be traded on the ZSE will be Wednesday March 27, 2024. The securities of the company will subsequently begin trading on the VFEX on Monday April 8, 2024.

The VFEX, the American dollar denominated bourse, is a subsidiary of the ZSE.

Greater accessibility to American dollar capital and an expansion of the investor base are some of the factors driving the proposed transaction. Other factors include lower trading costs, more liquid shares, less limitations on dividend repatriation for overseas shareholders, better performance benchmarks, and efficient financial reporting.

“Edgars will gain an enhanced capacity to raise capital in foreign currency, supporting the company’s foreign currency needs. The potential development of the VFEX into a regional exchange strengthens Edgars’ position of attracting a more extensive investor base, aiding the company in its endeavors for domestic and regional expansion,” the company said.

It continued: “Additionally, the United States dollars reporting mandate on VFEX will contribute to a reduced risk perception for Edgars.

“This in turn, will afford the company greater leverage to access alternative forms of financing on favourable terms.

“The VFEX provides foreign shareholders with the freedom to repatriate dividends and proceeds from share disposals without hindrance, compared to the ZSE, which faces exchange control challenges due to its trading in local currency and the widespread shortage of foreign currency nationwide.

“(Furthermore), companies listed on VFEX are required to present their financial results in United States dollars. This facilitates a more effective   assessment of the company’s performance compared to the Zimbabwe dollar, which foreign investors may find challenging to fully comprehend due to its volatility. Additionally, VFEX-listed firms are obligated to adhere to specific-to-specific governance and reporting standards, contributing to enhanced overall management and company performance.”

In a trading update for the nine months to October 8, 2023, Edgars Group CEO Savious Mushosho stated that the group did exceptionally well during the third quarter achieving unit sales of 649,788 which was 28.5% up from the same period last year which had 505,531.

In addition, Mushosho said cumulatively for the nine months to 08 October, the unit sales were 2.4% below last year due to the currency instability experienced in the second quarter which saw customers losing a significant part of their buying power especially the civil servants who are 35% of our business.

Mushosho said, Edgars chain quarter three unit sales increased by 39.7% compared to the previous comparative year.

Revenue for the nine months was up 43.99% relative to the same period last year.

According to Mushosho, the Jet chain sold 334,910 units in the third quarter, an increase of 18% over the 283,877 units sold in the same period last year.