The Victoria Falls Stock Exchange (VFEX) started operating in October 2020 and listings include SeedCo, Caledonia Mining Corp., Bindura Nickel Corp. and Padenga Holdings Ltd.
According to Bloomberg, the bourse offers tax exemptions on capital gains and promises investors the ability to repatriate funds from a country where foreign exchange is typically in short supply.
- After an initial slow start at its founding, VFEX attracts more listings. However, some of the companies are the ones migrating from the Zimbabwe Stock Exchange.
- Tharisa opens a fixed income note offer to raise US$50 million to be listed by way of introduction on the Victoria Falls Stock Exchange (VFEX).
- Zimbabwe’s largest and oldest food manufacturer, National Foods Holdings Ltd., is set to list with immediate effect on the VFEX
Now, are these enough reasons why several companies are migrating from Harare’s main exchange listing immediately on a stock exchange that trades exclusively in US dollars?
Let us look at companies and other products which recently announced their immediate listing on VFEX.
Read: Is Victoria Falls Stock Exchange capital market innovation or regulatory haven?
National Foods Holdings Ltd
National Foods Holdings Ltd., Zimbabwe’s largest and oldest food manufacturer, is set to list with immediate effect on the VFEX marking an end to the company’s 52-year listing on country’s main exchange, ZSE. Zimbabwe Stock Exchange trades solely in local currency. National Foods, the 102-year-old company, first listed in 1970.
“The board has approved the delisting of the company from the Zimbabwe Stock Exchange, immediately followed by its listing on the Victoria Falls Stock Exchange,” Group Legal Counsel and Company Secretary Leigh Howes, said in a cautionary statement released on Monday.
Simbisa Brands Ltd
Fast food giant, Simbisa Brands Ltd., the firm that controls high-profile restaurant chains across African markets, spurred its planned VFEX listing, notifying investors in a comprehensive roadmap that the deal may be through by December 2, 2022.
Simbisa, which has risen from its Zimbabwean roots to establish a formidable African network, executes its strategy through a string of high-end hospitality brands that include the flagship Chicken Inn, Pizza Inn, Creamy Inn and Bakers Inn, one of the country’s biggest bread producers.
It also holds the franchises for quick service restaurant chain; Rocomamas, Nandos and Steers, along with Galito
In a statement that disclosed Simbisa’s rationale to switch from the ZSE, the firm’s board rallied shareholders to give an emphatic nod to the transaction at an extraordinary general meeting scheduled for November 18, 2022.
The company said the VFEX was well-placed to help Simbisa execute its African forays, while improving the liquidity of its stocks.
“Capital raised through a VFEX listing may be held in an approved local or offshore account, and there will be an allowance for offshore settlements for executed trades for easier repatriation of dividends and more transactional flexibility for existing shareholders. This would attract a more diverse shareholder base and enable Simbisa’s shareholders to raise the value of their holdings, incentivising greater liquidity.”
“The VFEX offers tax incentives for shareholders, which include a 5% withholding tax on dividends and no capital gains tax on share disposal. Shareholders would be able to retain more of their earnings compared to the ZSE.
“VFEX would elevate Simbisa’s local and international profiles which would in turn boost the company’s commercial standing. This would boost the company’s ability to raise capital from foreign investors,” the firm said.
Nedbank Zimbabwe Depositary Receipts (ZDRs)
Nedbank Zimbabwe is planning to list on the Victoria Falls Stock Exchange (VFEX) on November 18, becoming the first lender to trade its stock at the platform since the bourse opened two years ago. Nedbank is a unit of the Johannesburg Securities Exchange-listed Nedbank Group, whose footprint spans across southern Africa.
According to an article by Newsday Zimbabwe, when the South African financial services firm, Old Mutual Plc (OMP), concluded its controlled separation from Nedbank in October 2018 and unbundled its majority stake in the bank, OMP shareholders received shares in the bank. As a result, many investors from Zimbabwe ended up owning Nedbank shares that were unavailable for local trading.
Read: Victoria Falls Stock Exchange plans to list an ETF linked to Old Mutual, PPC shares
In response, Corpserve (a local financial securities services administration firm) set up a share dealing facility through Corpserve Nominees (Private) limited that allowed shareholders of Nedbank Zimbabwe to sell their shares on the Johannesburg Stock Exchange (JSE). However, this alternative arrangement ultimately didn’t work.
“Shareholders of Nedbank Group Limited on the Zimbabwe branch register (local shareholders) who are interested in trading their equity securities in Zimbabwe may elect, by completing (a) form of acceptance, to convert their Nedbank shares into Nedbank depository receipts to be issued and listed on the Victoria Falls Stock Exchange.
Zimbabwe Depository Receipts (ZDR) will be issued in Zimbabwe through a private placement sponsorship under Corpserve Nominees as a non-issuer-sponsored facility. This means that Nedbank Group Limited will not be the issuer of Nedbank ZDRs on the VFEX and will thus not play an active role in the proposed listing. Nedbank has, however, provided a letter of no objection for the establishment of a non-issuer-sponsored facility,” said the financial services outfit in a pre-listing statement sent to shareholders.
Nedbank added that shareholders who do not wish to participate in this ZDR initiative will not have their shares transferred out of Corpserve Nominees as Zimbabwe Depository Receipts. Their Nedbank shares will continue to be held under Corpserve Nominees in South Africa.
Read: The Victoria Falls Stock Exchange A Stepping Stone Towards Zimbabwe’s Economic Progression?
Tharisa’s Karo Mining Holdings bond for PGM project
Tharisa has announced the opening of a fixed income note offer by Karo Mining Holdings plc, its subsidiary, to raise US$50 million to be listed by way of introduction on the VFEX. The proceeds from the Bond will be applied to part fund the Karo Platinum Project. It is the first debt listing on the exchange.
The bond is US dollar denominated and will be issued in minimum denominations of US$2500 by way of a private placement. The bond is not rated and will be guaranteed by Tharisa. The minimum amount to be raised from the bond is US$25 million. Should applications for less than this amount be received the bond issue will not proceed. The issuer reserves the right to increase the total aggregate issue amount, subject to approval by its board and the guarantor, by delivering notice thereof to note holders.
The VFEX approved the listing of the Bond. Participation in the bond will be by way of private placement and is not restricted to Zimbabwean financial institutions or residents.
Arxo Finance plc, a wholly owned subsidiary of Tharisa, which was established to provide funding to Tharisa group companies, has committed to subscribe for US$10 million of the notes.
Tharisa is a 70 per cent shareholder in the Issuer, a company incorporated in the Republic of Cyprus, which in turn indirectly owns 85 per cent of the Karo Platinum Project, with the Government of Zimbabwe holding the remaining 15 per cent of the project, on a free carry basis.
