Online Reporter
Nelson Gahadza
Zimpapers Business Hub
National Tyre Services Limited, one of Zimbabwe’s leading tyre retailing companies, is seeking shareholder approval for the voluntary termination of its listing from the Zimbabwe Stock Exchange and an offer by Radun Investments to minority shareholders.
In a circular to shareholders, the company said it was concerned with the sustained illiquidity in the trading of the company’s shares on the ZSE, as over the 12-month period ending July 31, 2025, NTS shares did not trade in eight out of the twelve months, and the average monthly trading volume was fewer than 3,5 million shares.
“While minority shareholders collectively held approximately 37,23 percent of the company’s shares as at the last practicable date, the actual free float has been significantly lower, with a substantial portion of these holdings being strategic or inactive.
“This illiquidity has undermined effective price discovery and limited shareholders’ ability to realise value or exit their investment positions,” NTS said.
Furthermore, the company said it continues to incur significant listing-related costs, including statutory audit fees, publication costs, and regulatory compliance expenses, which have become disproportionate to the benefits derived from maintaining a public listing.
The rationale for the proposed transactions includes limited free float and market liquidity. The company said that as of the last practicable date, minority shareholders collectively hold 37,23 percent of NTS shares.
“However, the actual free float is substantially lower due to strategic or inactive holdings by institutional and long-term shareholders,” reads part of the circular.
“This low liquidity has curtailed effective price discovery and limits the benefits that should ordinarily accrue from a public listing,” NTS said.
Further, NTS said the Zimbabwean tyre industry has, in recent years, experienced heightened competition due to low entry barriers and the influx of imported brands, resulting in a loss of market share for the company.
NTS said limited access to long-term and affordable capital has also constrained the company’s ability to execute its expansion strategy and maintain adequate working capital levels.
“Despite efforts to secure funds through the local banking system, borrowing has remained prohibitively expensive, particularly following the imposition of ZWL borrowing interest rates of up to 200 percent in 2022, rendering debt financing unsustainable,” reads part of the circular.
In terms of the offer, Radun is making an offer to acquire up to a maximum of 94 513 956 ordinary shares, representing 37,23 percent of the issued share capital of NTS, at a cash consideration of US$0,0248 per share.
The Extraordinary General Meeting (EGM) will be held later in November.
NTS has established itself as a leading player in the Zimbabwean tyre retail and service industry, with a national footprint, longstanding brand recognition, and a diversified product and services portfolio spanning new tyre sales, retreading, and fitment services.
However, operationally, NTS said it continues to face significant challenges that include current power supply deficits, which have disrupted production at the retreading factory, where capacity utilisation has averaged approximately 30 percent.
“Frequent electricity outages have negatively affected branch operations, resulting in estimated revenue losses of up to 40 percent of projected sales.
“Extended supply chains from Asia, where most tyre suppliers are located, have further strained the company’s liquidity by locking up working capital in goods in transit for prolonged periods.
“As a result, the company’s cash flow position has deteriorated, impeding its ability to meet mandatory obligations, including listing-related fees, statutory payments, and the replenishment of inventory,” the company said.
It added that the business has also been unable to declare dividends for over a decade, diminishing its attractiveness to investors, and these cumulative pressures have contributed to high staff turnover and the loss of critical technical expertise, exacerbating operational inefficiencies.
Meanwhile, according to the circular, the company’s strategy after the delisting will be focused on pillars that include branch network optimisation and expansion.
“NTS will continue to refurbish and modernise key branches, invest in customer service enhancements, and explore targeted expansion opportunities in underserved markets to improve national coverage and service efficiency,” reads part of the circular.
In addition, the company intends to broaden its product and service offerings through strategic partnerships, the introduction of complementary automotive products, and enhanced digital channels for customer engagement.
The company will also focus on operational efficiency and cost management through continuous improvement in procurement, inventory control, and cost rationalisation to protect margins and improve shareholder value.
“The retreading business is expected to play an increasingly central role given growing demand for cost-effective tyre solutions. NTS also plans to scale its fleet management solutions and business-to-business (B2B) offerings to grow recurring revenue streams,” the company said.
