Zimplow consolidates

way of tender to take up its stakes in all entities it had put up for disposal.
Interestingly, listed Zimplow Limited has moved with great speed to conclude a transaction to take over the entire 57,21 percent shareholding the central bank had in Tractive Power Holdings.
Zimplow, in collaboration with Transfrontier Investments, is coming up with a US$11,2 million rights issue to finance the purchase of the remaining shares.
If existing shareholders decide not to follow their rights they would be diluted by about 40 percent.
Earlier this month Zimplow gained control of 16 percent of TPH after it swooped on 27,2 million shares valued at US$3 million through a special bargain on the ZSE.
However, the rights issue is subject to shareholder approval at the end of the month.
The rights issue ratio will be two ordinary shares for every three ordinary shares already held by company shareholders.
Shareholders are expected to approve the acquisition of 88 526 968 ordinary shares, representing 57,21 percent interest at a price not exceeding US$0,11 per share. There has always been a link between Zimplow and TPH.
Zimplow is a manufacturer and distributor of animal-drawn implements in Sub-Saharan Africa as well as manufacturer and distributor of fasteners locally.
TPH operates three divisions: Barzem, a joint venture with Barloworld South Africa focusing on earthmoving equipment; Farmec which deals in tractors and implements; and Puzey & Payne which specialises in motor vehicle spares and Perkins generators.
After the transaction analysts see significant potential to consolidate its position in the sector.
Zimplow’s exposure to TPH is expected to offer an avenue for product and market diversification within the agriculture and mining sectors.
The agriculture and mining sectors are expected to grow by 11,6 and 15,9 percent respectively this year and this gives great potential for Zimplow a major player in the sector.
Furthermore, the TPH investment also offers Zimplow to increase revenue and reduce costs through the exploitation of regional cross-selling opportunities, enhanced economies of scale and product sharing.
The investment will potentially complement Zimplow’s strategy to be the leading agricultural and mining equipment supplier in Zimbabwe and another fair market share in the region.
Zimplow is one of the major performers on the ZSE and has displayed solid financial performance since dollarisation in 2009 driven by its flagship Mealie brand.
It is also among the first companies to declare a dividend in the US dollar era. Apart from Tractive Power, the RBZ, through its investment vehicle Finance Trust of Zimbabwe, holds 64,9 percent in listed Astra Holdings and 64 percent of Cairns.
Tractive Power demerged from the Astra Group in 2001 when 33 percent of the group was floated.
Astra has interests in paint, steel and chemicals through its 50 percent joint venture with Hippo Valley.
The group also controls Northmech Zim through a joint venture with Invicta Holdings of South Africa.
RBZ is also the major shareholder in Tuli Coal (Pvt) Limited, controlling 70 percent and 100 percent of another mining operation, Carslone Enterprises Limited.
The central bank is also disposing of Homelink, a housing development scheme and a money transfer agency.
Sirtech Limited, a science research and industrial development firm, in which RBZ holds a 65 percent stake, is also up for grabs.
The disposal of a 50 percent stake in Transload, which deals with biodiesel, completes the list of the seven companies up for sale.
Going forward, the market is awaiting to see what will happen to the other six companies, mainly those that are ailing and scouting for deep pocketed investors.