28 December 2012

Zimbabwe: TN Bank to Delist From Stock Exchange

TN Bank will delist from the Zimbabwe Stock Exchange as the company seeks to introduce new equity partners and recapitalise in line with the Reserve Bank of Zimbabwe set minimum capital requirements.

This comes a few weeks after former controlling shareholder Mr Tawanda Nyambirai sold his entire shareholding in TN Bank to mobile phone operator Econet Wireless.

The buyout deal was such that Mr Nyambirai becomes a minority shareholder in Econet while TN Bank becomes a subsidiary of the mobile telecommunications group.

Econet held 45 percent of the bank before the deal, with Mr Nyambirai holding the balance.

TN Bank says it needs to raise money to meet the new minimum regulatory capital requirements of US$100 million by December 31 next year.

The management feels that any engagement with potential investors will likely value the company, using its trading price which at this time undervalues the company.

TN Bank is trading at a discount of approximately 36 percent to its net asset value of US25c per share.

Since its listing in June this year, TN Bank share price has dropped by 50 percent from US32,08c to U$16c.

"Hence such valuations will result in significant dilution of current shareholders," said TN Bank.

"The directors deem it prudent to delist to allow the company sufficient trading time as an unlisted entity before engagement with new investors."

The company says it will consider relisting if the trading environment improves.

An extraordinary general meeting will be held on January 18 next year. If the transaction gets approval, the company will be a public entity instead of a listed public company.

Shareholders will no longer be able to trade their shares on the ZSE, but can still be able to sell their shares by private treaty between willing sellers and willing buyers at a price and on terms to be mutually agreed between the buyer and the seller.

Market analysts say the proposed delisting will not benefit minority shareholders.

Commenting on the proposed transaction, Imara Securities said the proper procedure would have been to offer minorities a price, usually at a premium to the trading price.

Imara said once the bank was delisted, minority shareholders would not have Securities Exchange Commission of Zimbabwe and ZSE protection.

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