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the Zimbabwe Stock Exchange.
If approved, the decision would see Caps ceasing to trade on the bourse on September 30 this year. It would also entail the company unbundling into three separate units – Caps Pharmaceutical Manufacturing, Distribution and Health Care.
Sources said shareholders would approve the delisting as the majority shareholder, Fredex Financial Services, owned by Mr Fred Mtandah, is in favour of delisting.
Mr Mtandah’s investment vehicle controls 40,6 percent of Caps while FCIV Investments controls a significant 14,8 percent.
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The Government disposed of its 31,77 percent stake in Caps in July 2002.
After delisting, Caps is expecting to bring in new investors into the group and raise about US$15 million to recapitalise operations. The group said funds could possibly be raised by way of new shares or other equity instruments through a possible rights issue or private placement.
Since its listing in 1969, Caps has had four rights offers, one bonus issue, one share split and a scrip dividend.
Conditions of delisting require shareholders to dispose of their interest in the company while the company is still trading on the bourse.
When a company is delisted, it means that shareholders can no longer trade their shares on the stock exchange since it would be a public company instead of public-listed company.
Caps said shareholders willing to shed their stake post-delisting can do so, but the price per share would be determined by private valuation and agreement between individual buyers and sellers.
Moreover, the means of sale would be restricted to private deals.
In a statement, the group had earlier indicated there were possibilities of relisting if they operated viably.
Caps said the decision to delist was to enable directors to be flexible and facilitate speed in decision-making.
Caps performance is below par and is facing operational challenges, which can be addressed if there was capital injection.
Very few companies quoted on the ZSE have managed to recapitalise and for the majority that managed to come on the market – shareholders failed to follow their rights.
Due to lack of funding, Caps shares have continued to trade at a discount, compared with the net asset value of the company.
Companies have failed to increase production as the liquidity constrains continue to hound the private sector.
Apart from drug manufacturing, Caps is also involved in retail, through QV Pharmacies, which has branches in Mozambique. The company owns Geddes Limited, St Anne’s Hospital, Caps South Africa and QV Pharmacies Limited.
Online Reporter