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In a circular to its shareholders, Zimplow said it would partner Transfrontier in buying the Reserve Bank’s 57,21 percent stake held through Finance Trust of Zimbabwe (FTZ) Limited.
“These negotiations have culminated in the parties signing a sale and purchase agreement relating to the FTZ’s entire 57,21 percent in TPH.
In terms of the sale and purchase agreement, the parties have agreed a purchase consideration of $0,11 per share,” said Zimplow.
The company said the deal cost and purchase price of the shares would be funded through a rights issue.
“Your directors seek shareholder authority and support to raise approximately $11,2 million being the purchase consideration and associated transaction cost,” said the company.
“In this regard, the directors propose to issue approximately 224 million new ordinary shares to existing shareholders of Zimplow, through a renounceable rights offer.”
It is envisaged that the acquisition will allow the company to diversify its operations and incomes.
“In the short term, is expected that TPH’s cash generating operations will make a sizeable contribution to the financial performance of Zimplow, thus providing the much needed diversification and smoothening of earnings,” the circular said
“. . . exposure to TPH will therefore offer an avenue for product and market diversification within the agricultural and mining sectors which are expected to be at the centre of Zimbabwe’s economic resurgence.”
“Furthermore, the TPH investment also offers Zimplow the potential to increase revenue and reduce costs through exploitation of regional cross-selling opportunities, enhance economies of scale, technology and product sharing,” Zimplow said.
Bongani Ndlovu