AGRICULTURal equipment maker and distributor Zimplow Holdings has announced plans to list on the Victoria Falls Stock Exchange (VFEX) after suffering a US$60 million value loss on the Zimbabwe Stock Exchange (ZSE).
The loss in value is owing to the depreciation of the Zimbabwe dollar against the United States dollar which translated to Zimplow's market capitalisation falling by a whopping 88,67% in real terms from its 2021 valuation.
Zimplow made the announcement of its delisting yesterday. Several companies have since delisted from the ZSE and migrated to VFEX, including Bindura Nickel Corporation, National Foods Limited, Simbisa Brands, African Sun, Axia Corporation, Caledonia Mining Corporation, Innscor Africa, National Foods Holdings, Nedbank Group Limited Zimbabwe Depository Receipts, and Seed Co International.
“The directors of Zimplow Holdings Limited (the company) wish to advise all shareholders and the investing public that the board has approved the delisting of the company from the Zimbabwe Stock Exchange, immediately followed by its listing on the Victoria Falls Stock Exchange,” Zimplow said.
“Further details of the transaction will be provided to shareholders once all regulatory processes have been finalised.”
Zimplow has now joined the trend of companies seeking a VFEX listing to preserve value.
As the ZSE continues to be rendered moot and unattractive by investors mainly due to the falling Zimbabwe dollar, companies are making plans to list on the forex-only VFEX.
The loss in Zimplow caused the transporter, Unifreight Africa Limited, in March, to report a loss in its Zimplow shares of $2,1 billion in 2022 and led to an overall loss of $1,5 billion to the group.
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In its last trading update for the nine months ended September 30, 2022, Zimplow said value preservation remained one of the top priorities for the group, amid a challenging operating environment.
Part of this strategy involved refocusing its three subsidiaries Barzem, CT Bolts and Powermac towards the export market.
The company reported that the difficult trading environment continued to put pressure on its customers who in turn were focusing on value preservation instead of capacity expansion.
“The impending rainfall season will drive demand for products and services under the group's agriculture cluster,” Zimplow said in a trading update for the nine-month period released on November 23, 2022.
“Furthermore, the continued national strategic thrust on infrastructural development coupled with the continued drive in output growth in the mining sector by central government, bodes well for the group's logistics and automotive cluster and the mining and infrastructure clusters.”
Zimplow added: “Value preservation, volume growth and cost efficiency remain top priorities for the group notwithstanding the challenging operating environment.”
