Online Reporter
Business Writer
DAIRIBORD Holdings Limited plans to voluntarily migrate its listing from the Zimbabwe Stock Exchange (ZSE) to the Victoria Falls Stock Exchange (VFEX), becoming the latest major company to seek a presence on the United States dollar-denominated bourse.
The dairy products manufacturer announced the proposed move in a cautionary statement issued on Thursday, saying its board had approved the delisting from the ZSE, which would be immediately followed by a listing on the VFEX.
“The board has approved the voluntary delisting of the Company from the Zimbabwe Stock Exchange, immediately followed by its listing on the Victoria Falls Stock Exchange,” the company said in a statement.
Dairibord said full details of the proposed transaction would be contained in a circular to shareholders, which is currently being finalised.
The company warned that the proposed migration could have a material impact on the market price of its shares and advised investors to exercise caution when trading the stock pending further announcements.
The planned move comes amid a growing trend of companies favouring the VFEX because of its United States dollar trading environment, foreign currency settlement framework and access to a wider pool of international investors.
In recent years, several high-profile firms, including National Foods and Simbisa Brands, have either listed or cross-listed on the VFEX as businesses sought to preserve shareholder value and align their capital structures with increasingly foreign currency-based operations.
Market analysts say the VFEX offers a number of advantages, including lower capital gains tax, reduced withholding tax on dividends for foreign investors and the ability to raise capital in hard currency.
The exchange also allows the free movement of capital and dividends, a feature regarded as critical by international investors and institutional funds seeking investment opportunities in Zimbabwe.
The migration trend has gathered momentum as many companies now generate significant portions of their revenue in foreign currency and are seeking a market that more accurately reflects the currency composition of their earnings.
For Dairibord, whose operations depend heavily on imported raw materials, packaging materials and equipment, a VFEX listing could improve access to foreign capital while providing a valuation benchmark in United States dollars.
The move is also expected to enhance the company’s visibility among regional and international investors at a time when Zimbabwe is positioning the VFEX as a gateway for investment into the national economy.
If approved by shareholders and the relevant regulators, Dairibord would join a growing list of blue-chip counters on the exchange, further strengthening liquidity and deepening market capitalisation on the VFEX.
The company said further announcements would be made as and when material developments relating to the transaction occur. Shareholders are expected to vote on the proposal once the circular outlining the terms and rationale for the migration is released.
