The newly incorporated Zimbabwe Stock Exchange Holdings Limited (ZSE Holdings) is set to make a buy-out offer to shareholders of the Zimbabwe Stock Exchange (ZSE) Limited as part of a major restructuring effort that will culminate in ZSE Holdings’ self-listing on the ZSE Main Board. This development marks a significant shift in the corporate structure and governance of the two entities.
Shareholder approvals for the restructuring will be sought at an Extraordinary General Meeting (EGM) scheduled for October 8, 2024. The restructuring plan includes a scheme of reconstruction, share splits, and an employee share option plan to facilitate the listing of ZSE Holdings.
The key objective of this initiative is to streamline operations, enhance liquidity, and unlock shareholder value by creating a more robust and efficient corporate entity. Once approved, ZSE Limited shareholders will sell their entire holdings in both ZSE Limited and its subsidiary, the Victoria Falls Stock Exchange (VFEX), to ZSE Holdings.
ZSE Limited operates a local currency stock market, while VFEX trades in US dollars, and despite the restructuring, both exchanges will continue to function independently under their existing licenses.
Incorporating ZSE Holdings, according to the circular, aims to create a listable holding company that will oversee a simplified structure. This reorganization is expected to facilitate the transfer of ownership from ZSE Limited and VFEX to ZSE Holdings while enabling operational independence.
Another key part of the restructuring is a proposed 1000-for-1 stock split, which will increase the number of shares in ZSE Holdings to meet the minimum listing requirements of the ZSE Main Board, which mandates at least 10 million equity shares in circulation. This stock split is expected to improve liquidity by making shares more accessible and affordable to a broader range of investors.
“The 1000-for-1 stock split will significantly increase the availability of shares in the market, improving liquidity without affecting ZSE Holdings’ market capitalization,” the circular stated. The move is seen as a confidence signal from management in the company’s growth prospects.
ZSE Holdings also plans to introduce 252 additional minority shareholders through a public or private placement of up to 10,000 shares, waiving pre-emptive rights for existing shareholders. This is intended to meet the ZSE’s listing criteria, which requires a minimum of 300 public shareholders.
Additionally, ZSE Holdings will launch a Share Appreciation Rights Plan (SARP) as part of its Employee Share Option Scheme (ESOS), allocating up to 10 percent of unissued shares to the scheme. The SARP is designed to align employee incentives with the company’s strategic objectives while minimizing shareholder dilution.
The directors of ZSE Limited and ZSE Holdings have emphasized that the self-listing of ZSE Holdings is a strategic move aimed at unlocking shareholder value, improving access to capital, and enhancing corporate governance. The listing will also position ZSE Holdings to introduce new financial products and services in the securities exchange and financial services markets.
The self-listing is expected to increase the visibility of both ZSE Limited and ZSE Holdings, boosting their brand strength and attracting new business opportunities.
“Strengthening the Zimbabwe Stock Exchange brand through listing on the ZSE Main Board will build confidence in ZSE Holdings’ future prospects,” the circular concluded.
Sourece: Herald