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The bank listed on the ZSE in July after its demerger from TN Holdings.
In a circular to its shareholders, TN Bank said its shares since listing had been illiquid.
“The board considered a number of factors regarding the continued listing of the TN Bank shares on the exchange, including, inter alia, the following. The share has been very illiquid and out of 108 trading days since listing the counter has only been traded on 33 days, 30 percent of the days the market was open. The volumes traded have also been low with an average of 9,811 TN Bank shares trading per day since listing, a mere 0,01 percent of the shares in issue,” reads part of the circular.
The poor trading of the bank’s share resulted in a constant decline in the price of the TN Bank share since listing.
The counter listed at a price of $0,3208 per share and as at 17 December 2012 the counter was trading at $0,16 per share a 50 percent discount from the listing price.
This means that the current share price of $0,16 is a discount of 36 percent on the company’s net asset value of $0,25 per share.
The commercial bank said following the announcement by the Reserve Bank that all commercial banks were required to have a minimum capital of $100 million by June 2014, it would meet the capital requirements from internally generated resources.
Such measures included shareholder capital injections through rights issues and the introduction of new investors into the company.
“Any engagement with new investors will likely value the company using its trading prices which at this time is undervaluing the company. Such valuation will result in significant dilution of current shareholders. The directors deem it prudent to delist now to allow the company sufficient trading time as an unlisted entity before engagement with new investors.”
The bank said it presently meets the December 2012 minimum capitalisation requirements of $25 million stipulated by the central bank.
The delisting of TN Bank effectively means that the financial institution would be turned to a public company instead of a listed public entity.
As a result of the delisting, shareholders will no longer be able to trade their shares on the ZSE.
“Shareholders will still be able to sell their shares however by private treaty between willing seller and willing buyer at a price and on terms to be mutually agreed between the buyer and the seller.
“The unlisted environment may not meet certain TN Bank shareholders’ investment objectives and these shareholders will be given the opportunity to dispose of their TN Bank shares prior to delisting.”
The delisting of TN Bank would see the financial institution becoming the 10th counter to move out of the ZSE listing register in the past few years.
Celsy and Cairns are some of the counters that delisted from the local bourse this year.
Online Reporter