adminStar Holdings Limited’s listing.
This is most likely the route West Star will pursue after it encountered complications in carrying on with the Red Star legacy, using the brand due to a troubled past.
The budding wholesale giant looked to perpetuate the Red Star brand after acquiring the group’s two wholesale business branches in Harare and Bulawayo.
After acquiring Red Star assets West Star initially traded as Red Star Wholesalers before a change of heart and subsequent rebranding to trade under the new name.
But apart from wanting to start on a new footing and cultivate its own identity, consistent with the trademark for other group operations, a reverse listing looks unlikely.
West Star chief executive Mr Ken Sharpe dropped the biggest hint to date when he mentioned direct listing for the first time since acquiring Red Star assets.
“We are considering the possibility of acquiring Red Star Holdings’ listing on the stock exchange, but even if that doesn’t happen, we will still list on our own,” he said.
And there apparently has not been much unanimity with the owners of Red Star Holdings regarding the acquisition of Red Star’s listing and of the remaining assets of the group.
Notwithstanding challenges around reverse listing, this route would be faster and less laborious and would be involved in reactivating the suspended listing.
But the transaction could only go as far as buying the two branches in Harare and Bulawayo, with the rest of the branches across the country deemed of little value to the group.
West Star said it would now concentrate on building its own strong identity, having failed to purge the lingering memories of Red Star’s financially troubled past.
“Customers had reliable and consistent suppliers before Red Star (Wholesalers) went into demise. But customers were now frustrated,” said Mr Sharpe.
Listing on the ZSE, expected to happen some time next year, is a priority West Star hoped would help it comply with the requirements of the indigenisation drive.
Through its loyalty customer programme, West Star will give customers credits based on the value of their purchases and later convert the value of the credits into shares.
West Star had hoped to complete the listing on ZSE before the end of this year.
The fledgling wholesale firm last week said it would open new branches, expanding its network from 12 next year to 30 in the next two years.
Mr Sharpe said that while the purchasing power in the country remained low, he was confident investing in the wholesale industry still made huge economic sense.
Demand for products in the country is expected to increase significantly once the economy recovers and depressed capacity utilisation improves as companies recapitalise.
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