Chronicle Editor
Harare Bureau
THE ongoing consolidation of Seed-Co’s entities, Seed-Co International and Seed-Co Zimbabwe, will see all the group’s shareholders earning dividends in United States dollars.
The Seed-Co Group is in the middle of implementing a reconsolidation transaction that will see Seed-Co Zimbabwe becoming a subsidiary of Seed-Co International. In Zimbabwe, Seed-Co International (SCIL) and Seed-Co Zimbabwe (SCL) are presently listed on the Victoria Falls Stock Exchange (VFEX) and the Zimbabwe Stock Exchange (ZSE), respectively. Seed-Co International is, however, primarily listed on the Botswana Stock Exchange (BSE). The deal, which will see Seed-Co International (SCIL) taking over its Zimbabwean subsidiary, is estimated at around $5,1 billion.
“Subject to SCIL shareholder approval in a general meeting, the Board is hereby proposing the acquisition by SCIL of up to 247,169,845 (two hundred and forty-seven million one hundred and sixty-nine thousand eight hundred and forty-five) SCL shares (constituting SCL’s entire issued share capital) through an open market offer to be settled through the issuance of new SCIL shares on the basis of 1 SCIL ordinary share for every 0,98 SCL ordinary shares held,” said the group in a recent notice to shareholders.
According to group chief executive, Mr Morgan Nzwere, the transaction will ensure US yields for all shareholders. “US dollar dividends will be payable to all shareholders and the Zimbabwean strategic business unit will finance its dividend contribution to the group from exports of both seed and some shared services,” said Mr Nzwere recently.
He explained the key reasons behind the proposed transaction.
“The transaction was necessitated by: Seed-Co’s internal strategic response to the changes in the status of Seed-Co International’s ZSE secondary listing brought about by the Government of Zimbabwe to stem parallel market foreign currency activities, which culminated in the suspension of all dual-listed counters from trading on the ZSE; the migration of Seed-Co International’s secondary listing from the local currency Zimbabwe Stock Exchange (ZSE) to the US dollar-denominated newly created Victoria Falls Stock Exchange (VFEX) in line with Government interventions; the need to eliminate possibility of implied exchange rate computations from the continued existence of two listed Seed-Co entities in Zimbabwe on the ZSE and the VFEX,” said Mr Nzwere.
“There was also need to make Seed-Co International’s hard currency listing in Zimbabwe comparable to other dual-listed entities, that is, incorporate operations in Zimbabwe, and the need make Seed-Co International listing in Zimbabwe identifiable with an asset in Zimbabwe just as it has an operating asset in Botswana where the primary listing is domiciled.”
Online Reporter