Seed producer SeedCo Limited (SCL) will next month delist from the Zimbabwe Stock Exchange following the acquisition of close to 80% stake of its issued shares so far by SeedCo International Limited (SCIL).
SCL shareholders, have since surrendered 78.08% of the issued share capital, to SCIL through a share-swap primary offer of one SCIL share for every 0.98 shares held in SC.SCIL, which has operations across the continent, is the only counter listed on the recently launched Victoria Fall Stock Exchange (VFEX), which is a US dollar-denominated bourse, and also trade pockets of its shares on the Botswana Stock Exchange.
SCIL is now targeting to acquire the remaining SCL shares through a secondary offer which closes on March 3, 2021.
This means, SCL no longer meet the minimum ZSE’s free float rule for a listed company because SCIL’s shareholding in SCL is now more than 70%.
Section 87 (d) of the ZSE listing requirements stipulates that at least 30% shares of a listed company must be held by the public.
“In line with the intentions specified in the circular to SCL shareholders published on January 13 2021 and in accordance with the ZSE listings requirements, SCIL will proceed to cause SCL to apply for voluntary delisting from the ZSE upon the close of the secondary offer on March 3 2021 and procurement of regulatory approvals,” said part of the joint SCIL and SCL circular, published last week.
Seed Co said once delisted any remaining SCL shareholders will not be able to trade their shares freely in the absence of a public market platform and an easily determinable reference price, the statement said.
In a circular to SCL shareholders, the company said the transaction was premised on SCIL’s strategic response to the changes in the status of its Secondary Listing in Zimbabwe brought about by policy initiatives introduced by the government.
“It is now thought that transferring only one of the entities, SCIL, to the VFEX trading in US$ while leaving SCL on the ZSE trading in Z$ will not protect value for shareholders.
Against this background, SCIL deemed it strategically fit to integrate SCL’s operations under SCIL with a view to strengthening the profile of SCIL following its Secondary Listing’s migration from the ZSE to the VFEX,” it said.
“This integration of the Zimbabwean operations will make SCIL’s profile on the VFEX comparable to its dual listed counterparts whose make up comprise both international and Zimbabwean operations.”
SCIL was established in 2000 in Botswana.
It was a wholly owned by SCL until 2018 when it was partially unbundled from SCL through a dividend-in-specie and was separately listed on the ZSE.
But, the two companies’ operations were under the same management.
SCIL’s shares, however, were suspended from the ZSE in June last year together with other dually listed counters Old Mutual and PPC following a government directive.
Government accused the three counters and mobile money operators of being used to sabotage the economy.
While SCIL listed on the VFEX, PPC and Old Mutual remain suspended from trading on the ZSE.
Government hoped Old Mutual and PPC would list on the VFEX.
But, they haven’t made the move, leaving SCIL, as the only counter listed on the VFEX.
SeedCo reported revenue of ZWL$975m (inflation adjusted) for the half year ended September 30 2020, up 55% compared to the same period last year.