URL listing to depend on economy outlook: Moyo

CZI-President-Busisa-Moyo.jpg

A PLANNED initial public offering of United Refineries Ltd (URL) will depend on the economic climate, CE Busisa Moyo says.

Nyasha Chingono

URL this year moved to strengthen its balance sheet by inviting pension funds and other investors to participate in a private placement with the anticipation of the company’s listing on the local bourse by 2020.

Moyo said although plans were still in place to list on the Zimbabwe Stock Exchange (ZSE), the final decision would be taken once the economic direction becomes predictable.

“We are in direct communication with Zimbabwe Stock Exchange and once economic direction is clear, we will be bolder with listing and capital-raising efforts,” Moyo told businessdigest this week.

Major counters on the local bourse have continued to rally as investors seek value in local stocks.

URL, which already has foreign shareholding, will also be looking to attract local capital from interested partners.

Moyo said pension funds would present a stable pool of funding for a public listed company. The company will also be looking at stable markets through secondary listing on the Botswana, Mauritius and the Johannesburg stock exchanges.

“Zimbabwe is our home turf and we need to perfect our market play first and then look to expand regionally and then continentally,” Moyo said.

Since 2016, URL has injected a cumulative amount of US$2 million in plant upgrades and refurbishments while another US$2,5 million will be spent within the next two years prior to listing and initial public offering.

URL was in October forced to shut down its soaps plant owing to foreign currency shortages after the Reserve Bank of Zimbabwe (RBZ) failed to allocate sufficient foreign currency.

“We have received support for raw material imports for 50-60% up to September but the last two months have plummeted to 20-30%. In October, we had to shut down our soaps plant for the month,” Moyo said.

He said the currency volatility had affected business, adding that the ballooning Real-Time Gross Settlement (RTGS) balances were not sustainable for retooling among other industrial requirements.

To weather the currency storm, URL has in recent years embarked on an eight-year soyabean project where the company is targeting 1 million metric tonnes of soya per annum.

Moyo also bemoaned the lack of harmonisation of trade laws, saying it had affected URL’s foray into foreign markets.

“We actually have orders from Malawi, Namibia and Botswana even from diaspora in South Africa but the challenge is the local permit system and process that prevents us from signing service level agreements; you just don’t know if you are assured of a permit because it’s done on a case-by-case basis with each application and can be denied by the authorities and we then suffer huge penalties,” Moyo said.

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