11 July 2012

Zimbabwe: TN Bank Ends ZSE Listing Dry Spell

ZIMBABWE Stock Exchange acting chief executive Mr Martin Matanda and chairperson of the board Mrs Eve Gadzikwa will this morning pop some champagne to welcome TN Bank to the local bourse, after a more than 15-month dry spell.

The local bourse last year failed to record any new listings as liquidity constraints continued to haunt the equities market despite calls for big corporates to go for initial public offers.

TN Holdings shareholders last week approved the demerger of the bank from TN Holdings, paving way for the separate listing bringing the total number of listed banks to nine.

TN Holdings shareholders will receive one TN Bank share for every 10 shares of the group, which changes its name to Lifestyle Holdings.

The bank was demerged from the holdings company through the issuance of 76 203 638 TN Bank shares to the holding company's shareholders at a subscription price of US$0,0000001 per share.

According to the outcome of the meeting, the bank would be capitalised through the issue of cash of 62 344 140 new TN Bank Limited shares to Econet Wireless Zimbabwe at a price of US$0,3208 per share.

This would result in Econet acquiring 45 percent of TN Bank Limited for US$20 million. This is despite Econet saying they wanted to divest from non-core business.

The mobile giant had invested in tourism group RTG and Afre Corporation, which are both listed on the local bourse.

ZSE will now have a total of 78 counters, four of which are mining counters.

Out of the 77 counters, four are suspended with TZI and Barbican having been in the cold for the past eight years.

Steelnet is also suspended after it was placed under judicial management and Gulliver after failing to publish its financials.

The stock exchange last popped the champagne in 2010 when Padenga Holdings unbundled from Innscor Africa.

Investment company Cambria Africa LonZim and mining company Whetstone had hinted at the possibility of listing on the ZSE this year.

Padenga is the only company that listed by way of introduction since the advent of the multiple-currency system in February 2009 while two others listed through a reverse listing.

TN Financial Holdings Limited listed through a reverse takeover of Tedco Holdings while Interfin Financial Services was admitted on the bourse through CFX Financial Services.These are the only three counters, which have listed on the bourse since dollarisation.

Finance Minister Tendai Biti in 2009 said four public institutions could list on ZSE by 2011 but not even a single one has gone public.

Foreign companies operating in the country were also expected to list on the ZSE as a way of meeting indigenisation requirements.

Empowerment laws require foreign firms to extend 51 percent of their shareholding to local Zimbabweans and a number of foreign firms had opted for IPOs to meet the requirements.

Last year three companies delisted from the exchange. Pharmaceutical group CAPS Holdings delisted in September last year to pave way for new investors in the group and raise about US$15 million to recapitalise operations.

The group said funds could possibly be raised by way of new shares or other equity instruments through a possible rights issue or private placement.

CAPS said the decision to delist was to enable directors to be flexible and facilitate speedy decision-making.

However, the group indicated it would return on the bourse but the goings on at the company's headquarters along Manchester Road appear to suggest that the future is not that rosy for the pharmaceutical outfit.

Red Star, a subsidiary of starafricacorporation, was also delisted and later bought by Westfoods, which is planning to relist the wholesale business.

Textile company David Whitehead Textiles also delisted from the ZSE under the weight of operational problems.

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