New Zimbabwe (London)

Zimbabwe: Chemco Delists From Zim Stock Exchange

AGRO-industrial concern Chemco Holdings officially delisted from the Zimbabwe Stock Exchange (ZSE) board on Thursday paving way for the group's restructuring. The company's shareholders during the first quarter approved the delisting of the company from ZSE.

Chemco was suspended from the local bourse in 2012. Shareholders voted for the issuing about 15,8 million Chemco shares to TSL by way of private placement in exchange for assuming debt and third party trade payables of up to US$2,64 million. TSL- Chemco's majority shareholder is of the view that corrective actions for the company, which has been posting losses over the last three years are best implemented outside of regulations and social pressures of the capital markets.

The company recorded a comprehensive loss of US$380 479 for the year ended October 2013 compared to a US$1,1 million loss same period last year. The company said it recorded a 27 percent increase in revenue to US$4,4 million from US$3,5 million during the same period last year.

Chemco said its business model, coupled with high overheads and its inability to effectively recapitalize operations, has resulted in losses over the last three years. The company's share price at the Zimbabwe Stock Exchange plunged to $0,005 from a peak of $0,300 before it was suspended. "In order to successfully undertake the corrective actions required, TSL has decided to engage the minority shareholders of Chemco with a view to acquiring all Chemco shares it currently does not own through a share swap under which TSL will exchange one TSL share for every 1,88 Chemco shares with the view to delisting the company's shares from the ZSE," read a circular published.

To support its operations over the last three years, Chemco borrowed $2,3 million from financial institutions and its major shareholder. Of this debt, US$1,983,541 is owed to TSL, which was provided to the company in the form of a shareholders loan with an interest rate of eight percent per annum. The remainder of the debt is a US$327, 000 bank facility. Advertisement

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