Axia shareholders approve migration to VFEX

Theresa Mhazo

Axia Corporation Limited shareholders have approved the planned delisting of the firm from the Zimbabwe Stock Exchange (ZSE) for relisting on the foreign currency denominated Victoria Falls Stock Exchange (VFEX).

Last year in its circular to shareholders, the company revealed that its board of directors met and agreed to migrate its shares from ZSE to VFEX, in a move expected to unlock value and help raise capital in forex.

Axia operates within the specialty retail and distribution sector with three operating business units namely: TV Sales & Home (TVSH) and Transerv and Distribution Group Africa (TDGA).

TVSH is a leading furniture and appliance retailer with sites located countrywide.

The company said the reasons for the proposed transaction include  access to US dollar capital to assist in its capital expenditure, working capital  requirements  and regional expansion initiatives, free repatriation of dividends and proceeds from the disposal of shares through offshore settlement for foreign shareholders, favourable tax incentives  for investors of zero capital gains tax and a 5 percent withholding tax  for foreign investors to enhance shareholder returns as well as lower trading costs of 2,12 percent compared to 4,63 percent on the ZSE, which would enable Axia to making savings and retain more value for shareholders.

It said listing on the VFEX would also give a US-dollar valuation of Axia, allowing shareholders to realise the true value of their holdings and provide a more accurate benchmark of the stock’s performance, while mitigating valuation volatility.

Additionally this would also enhance the company’s regional profile and commercial standing; strengthening the company’s prospects for both local and regional expansion; and  will ensure more efficient financial reporting through US-dollar denominated group financial statements, which will contribute to a lower risk perception for the company as well as increasing the company’s leverage to access other forms of finance at favourable terms.