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Zeco IPO oversubscribed

Kuda Chikwanda

ZECO Holdings initial public offering (IPO) has been oversubscribed after receiving bids in excess of $50 trillion for the subscription of over 800 millio

n shares, businessdigest has learnt.

Zimbabwe Stock Exchange CEO Emmanuel Munyukwi said Zeco’s IPO, which closed late last month, was oversubscribed but the exact figures will only be available next week.

“The preliminary figures I have before me are showing that it (Zeco) is oversubscribed by one and a half times. It could surpass this but exact figures can only be available some time next week,” said Munyukwi.

The IPO was for 20% of Zeco’s total issued share capital which is currently valued at $101 trillion and should have raised almost $20,15 trillion for capital expenditure outlays and working capital requirements. The money will be used in the group’s major subsidiaries, Delward which traded as Zeco Engineering and Critall Hope.

Munyukwi said they were counting the postal subscriptions that were still coming in and were also in the process of verifying Real Time Gross Settlements (RTGS) made for the shares.

“Postal subscriptions are still trickling in and coupled with the wire transfers, we are still analysing the results of the IPO,” Munyukwi said.

The results of the offer were submitted to the ZSE listing committee last Friday and were scheduled to be published today had it not been for the delay in verifying wire transfers and in receiving postal subscriptions.

Zeco’s management said $5,8 trillion will be used for foundry, machinery, equipment while the other $9,1 trillion will be used for accessories, raw materials and consumables

Another $2 trillion spare parts for existing plant and machinery ($2 trillion), new IT infrastructure ($1,3 trillion), and transport and distribution logistics ($1 trillion).

The remaining $1,007 trillion would be used to cover IPO costs.

The offer opened at a slow pace with investors chalking up just four million Zeco Holding shares — about 0,5% of the offer — and spending $100 billion in the first week of the IPO.

Phillip Chiyangwa owns 65% shares in Zeco Holdings through Native Africa Investments Ltd, followed by CBZ Nominees with 10% and Zeco Holdings CEO Tendai Savanhu with 4% of the shares. The IPO was being underwritten by CBZ Bank Ltd.

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