ZECO seek shareholders nod to change focus
RYAN CHIGOCHE
Listed engineering firm, ZECO will seek shareholders’ nod to shift strategic focus to venture into property investment and development sector at a crucial extraordinary general meeting to be held on August 17.
In a notice to shareholders, board chairman, Benjamin Rafemoyo said the directors have considered the change in thrust and recommended shareholders to vote in favour of the ordinary resolution relating to the proposed ratification.
“Therefore, the directors propose to convene an EGM to be held on 17 August 2022 to seek shareholders ratification of the change of the strategic focus of ZECO Holdings Limited from a rolling stock company to a residential and commercial property investment and development company as outlined,” Rafemoyo said.
ZECO Holdings Limited’s main line of business at the time of its initial public offering was the assembly and restoration of locomotives, the production and skips for the mining sector.
The expansion of the company was dependent on the National Railways of Zimbabwe’s expected privatisation or then-anticipated revival.
However the company’s possibilities as a rolling stock company have been eliminated by the uncertainties that have surrounded the railroad transportation industry over the years, the closure of several mines, and the informalisation of the mining sector.
As a result, the shareholders of the firm have gone for years without seeing any capital growth or dividend income from their ongoing investment in the rolling stock business.
In order to maximise shareholder value, the board decided to shift ZECO Holdings Limited’s strategic emphasis from a rolling stock firm to a residential and commercial property investment and development company.
To meet the new strategic emphasis, the company completed the sale of its rolling stock assets for US$ 4.5m and the purchase of a residential plot of land totalling 3,6395 square meters, including all developments in Harare for US$ 2.1m.
Justifying the shift in strategic focus in the financial year ending 31 December 2022 the company made a profit of ZWL$52m driven by the positive performance of the construction sector where they shifted their focus to.
