The Herald (Harare)

Zimbabwe: Radar Seeks to Demerge Subsidiary

RADAR Holdings will convene an extraordinary general meeting of shareholders for permission to demerge its subsidiary, Border Timbers and enhance focus on core business.

The Zimbabwe Stock Exchange listed construction group said the EGM would be held on December 10, 2012.

Radar directors intend to distribute 22 005 087 shares in Border, representing a 51,24 percent stake in the timber processor, to existing shareholders of Radar Holdings. Other major shareholders in Border Timbers, also listed on the ZSE, include Franconian Investments (25,7 percent), Roanne Nominees (10 percent) and Illaria (10 percent).

"The distribution in specie will have no impact on the shareholding at RHL level, however, RHL's shareholding of 51,24 percent in BTL will no longer exist. The board believes that the distribution in specie of all 22 005 087 BTL shares held by RHL will allow for an enhanced focus and strategic direction for the remaining structure," said Radar said in an abridged circular to shareholders.

The shares in question will be distributed on a pro-rata among the existing Radar shareholders on the record date.

Radar said in light of the competition in the economy, the demerger of BTL was necessary given the differing financial needs and sectoral focus of each business.

Apart from a more focused strategic business direction, demerging BTL will enable Radar to undertake mergers and acquisitions with entities in the same and related sectors. This would enable the firm to build on the already positive performance the company has achieved thus far.

But the transaction will sail through subject to approvals from 50 percent of RHL shareholders, Securities Commission of Zimbabwe, Reserve Bank of Zimbabwe and the approvals committee of the Zimbabwe Stock Exchange.

Radar after tax profit declined from US$4,9 million in the full year to June 2011 to US$2,5 million in the same period this year. But the construction group's revenue increased significantly from US$26,5 million in the 12 months to June 30 2011 to US$36,2 million in the comparative period this year.

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