THE delisting of pan-African seed producer, Seed Co Limited (SCL), from the Zimbabwe Stock Exchange (ZSE) took a major step towards conclusion this week after the firm notified its last trading was Tuesday.
The move follows a merger that was recently approved by shareholders holding a combined 78%.
Seed Co operates through the ZSE-listed SCL and the Botswana domiciled Seed Co International Limited (SCIL), which has been aggressively expanding since launching two decades ago.
But as part of a consolidation plan that directors hope will unlock shareholder value, the group’s assets are being merged, with the local unit exiting the ZSE.
The combined assets will be listed on the foreign currency denominated Victoria Falls Stock Exchange (VFEX), where SCIL is already quoted.
“Reference is made to the Seed Co International Limited-Seed Co Limited transaction timetable and the last press announcement of the offer results on February 3, 2021, which advised that 78,08% of Seed Co Limited shareholders had accepted the offer by tendering irrevocable and unconditional Forms of acceptance, surrender and transfer,” SeedCo group company secretary Terrence Chimanya wrote to ZSE head legal and compliance Lyndon Nkomo, in a letter dated February 24, 2021.
“This letter serves to confirm that February 23, 2021 was the last day to trade in Seed Co Limited shares and that the secondary offer is closing on March 2, 2021 to allow all trades to be settled and transferred. Please find enclosed for your approval the last market announcement we wish to publish on Thursday February 25, 2021 advising of latest results of the offer. We look forward to your usual prompt feedback in this regard.”
Chimanya also told Nkomo that following the secondary offer on March 2, 2021, the company would make another announcement of the offer results and formally request the termination of the listing of Seed Co Limited in line with the disclosures made in the transaction documents pursuant to the ZSE listing requirements.
In a market announcement published yesterday, Seed Co revealed that 84% of its shareholders approved the merger and delisting from the ZSE.
‘Further to the announcement made on February 3, 2021, the boards of Seed Co International Limited (SCIL) and Seed Co Limited (SCL) wish to advise shareholders and the investing public that the irrevocable and unconditional acceptances of the offer by SCIL to SCL shareholders closed at 84% on Tuesday February 23, 2021,” Chimanya and SCIL company secretary Eric Kalaote said in a joint statement.
“As specified in the circular to SCL shareholders published on January 13, 2021 and the subsequent announcements made thereafter, and in accordance with the ZSE listing requirements, SCIL will proceed to cause the voluntary delisting of SCL from the Zimbabwe Stock Exchange (ZSE) upon the closure of the secondary offer on March 2, 2021.
“Consequently, 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.”
They said SCIL will invoke the provisions of the Companies and Other Business Entities Act (Chapter 24:31) to acquire any remaining shares after the closing date of the secondary offer.
However, advisory firm, Imara, has warned that the deal may not benefit Zimbabwean investors.
“We do not support that proposal as it would result in Seed Co Zimbabwe delisting from the ZSE,” Imara said.
“For domestic investors based in Zimbabwe it will, therefore, not be possible to invest ZWL (Zimbabwean dollar) savings into the Seed Co group again; SCIL shares can only be bought in Botswana for Pula or on the VFEX for US dollars. Under current exchange control regulations it will be onerous if not impossible for Zimbabwe pension funds and private individuals with no access to foreign exchange to do so. In our view this is a great shame. For existing domestic shareholders in Seed Co Zim, they would still have ownership of Seed Co Zim via SCIZ but they would most likely never be able to acquire more shares in the group again.”