Shareholders of Zimplow Holdings have approved the listing of the company on the Victoria Falls Stock Exchange (VFEX) to join 12 stocks already trading on the US dollar-denominated bourse.
Shares are expected to be listed on July 14, 2023.
The shareholders of Zimplow, which has diversified operations including in the manufacturing and distribution of agricultural and mining equipment approved the delisting of the company from the Zimbabwe Stock Exchange (ZSE) and subsequent listing on the VFEX at the extraordinary general meeting on Thursday.
Zimplow chief executive Mr Vimbayi Nyakudya said the transaction would allow the company to move away from the currency distortions on the ZSE and position the group to penetrate regional markets and raise capital for expansion projects.
“We want to use VFEX as a platform to raise capital; right now we can’t raise capital on the ZSE because of currency distortions and we are (also) undervalued,” Mr Nyakudya told The Herald Finance & Business in an interview after the EGM.
“There is a huge disparity in the valuation of the ZSE and the actual valuation of Zimplow.”
Zimplow is taking the VFEX listing as an opportunity to build a strong regional and international profile, and attract more investors at a time it is strategically positioning itself to be a regional agriculture and earthmoving equipment supplier.
Although VFEX is still experiencing low liquidity, Zimplow is upbeat the migration is a viable option in line with its long-term plans of becoming a regional giant.
“We have been on the ZSE for a long time, (and) as a result of currency distortions we believe no one has taken time to understand what Zimplow really is. (Also) in the market, it is seen as a farming and mining implements maker whereas it is a diversified company (which) altogether has eight businesses cutting across (several) sectors.
“Now, we are trying to build a strong profile. Our business is anchored on the sectors that drive the economy; that is agriculture, mining, construction, infrastructure in general, and automotive and transport equipment as well,” said Mr Nyakudya.
A subsidiary of the ZSE, the VFEX was launched in 2020 as an off-shore financial services centre in a bid to attract global capital and restore foreign investor confidence in the capital markets while helping companies to raise capital in foreign currency.
The exchange has continued to gain momentum, as issuers chase broadened capital sources, tax incentives, and brand positioning. Market watchers anticipate more migrations will continue in the short to medium term. The ZSE is also upbeat the exchange will attract more quality stocks as well as ETFs and REITs. Liquidity challenges remain a major drawback, limiting pronounced investor participation.
However, as the number of listings on the VFEX continues growing, and the flow of US dollar liquidity increases in the formal economy, improved activity on the VFEX in the medium to long term is expected, according to FBC Securities in their quarterly report. – Herald