An offer for CFI Holdings shares to the market is now shrouded in mystery after the company disowned the offer.
By Melody Chikono
This comes after the Zimbabwe Stock Exchange (ZSE) wrote to CFI Holdings asking it to clarify the origin of a notice that has been running in the press.
In an advert run in local newspapers, CFI made an open offer for its shares at US$1,10 per share, a premium of 63%.
As at December 31 2017, the counter was at a premium of 1,72 to its book value and had a price-to-earnings ratio of 9,48.
The notice, according to the ZSE, has not been approved in line with correct procedure.
Trade in the group’s shares was suspended by the ZSE on January 2 this year amid corporate governance concerns and the need to have at least 30% of the total issued share in the hands of the public in line with listing requirements.
CFI Holdings Ltd has since February 8 2018 published a notice inviting CFI Holdings Limited shareholders to sell shares at an offer price of US$1,10.
ZSE acting CE Martin Matanda told businessdigest this week that the regulator, the Securities Commission of the Zimbabwe (Seczim), had also been notified of CFI’s actions.
“The ZSE wrote to CFI Holdings Ltd on 9 February 2018 to obtain clarification on the origin of the notice but is yet to get a response. The ZSE is therefore, as of now, not sure who is responsible for the Notice, whether it is a shareholder or it is the company itself.
“CFI Holdings Limited has been asked to clarify the origins of the Notice as it was not approved by the ZSE in terms of normal procedure. Secondly, the regulator (SECZ) has been alerted of the actions of the Company through this notice. The decision of the ZSE will be determined through its Board,” he said.
Matanda said the price in the notice is not market determined and shareholders or investors should be worried about how it was arrived at.
“The investing public is urged to shun off-market trades to avoid unnecessary risks. The investing public is advised that when a listed company’s shares are suspended from trading, transfers between seller and buyer are similarly suspended and therefore settlement for transactions effected for off market trades cannot be concluded,” he said.
While he said the ZSE could not speculate on the company’s intentions until it is clear where the notice originated from, Matanda said there are chances that a shareholder or other party may have used CFI’s logo without the company’s consent.
Should that be the case, he said listing was a voluntary decision by a company and dictated that the firm is expected to abide by the listing requirements.
“Currently trading in CFI shares are suspended on the ZSE and the company is expected to abide by the suspension,” he said.
According to the notice, “pursuant to the suspension of the trading of the shares in the company’s shares on the Zimbabwe stock exchange as announced by the ZSE on January 2 2018 this offer constitutes an open offer to CFI shareholders for the purchase of their shares.”
The company’s stock last traded at US$0,70 per share and the current offer is at US$1,10 per share.
CFI has become a habitual offender on the ZSE, having been suspended twice in a row.
However, the major shareholder, British tycoon Nick van Hoogstraten, is on record accusing the ZSE of “complicity” in the troubles that have rocked the suspended CFI Holdings Limited, and suggested the firm would do well to exit the bourse altogether.