NATIONAL Foods Limited (Natfoods), one of Zimbabwe's largest food producers, stated this week that it will delist from the Victoria Falls Stock Exchange (VFEX), as it no longer requires funding from the market.
This development comes as BridgeFort Capital is preparing to leave the Zimbabwe Stock Exchange (ZSE) after submitting its paperwork.
BridgeFort, which is voluntarily delisting, said it’s move was part of a transition into a financial services outfit following a deal with South African based Diaspora Kapita, an investment firm.
It was a dramatic week on Zimbabwe’s capital markets, a reminder of the de-listing wave that hit the ZSE about a decade ago, with many counters citing hefty regulatory financial commitments.
Companies that de-listed for various reasons at the time included Caps Holdings Limited, the pharmaceutical outfit, Radar Holdings and Chemco.
Natfoods had been trading on the four-year-old VFEX since 2022.
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If shareholders approve the transaction during an upcoming extraordinary general meeting, it will transition to a private firm.
“Delisting National Foods will grant the company increased flexibility to streamline its operations and concentrate on long-term strategic objectives,” Natfoods said in a circular.
“The company no longer requires capital from public equity markets in the near term, reducing the advantages of maintaining a VFEX listing.
“A significant portion of National Food’s shares, specifically 75,18%, is held by two major shareholders, limiting the influence and participation of smaller retail investors, further supporting the rationale for delisting.”
“The delisting will enable National Foods to redirect spending on substantial regulatory and compliance expenses to initiatives that are more closely aligned with the company’s needs.
“The proposed share repurchase offer provides an opportunity for shareholders to access the full value of their shares and address the liquidity constraints associated with the limited trading activity of the shares on the VFEX.”
Formally known as Medtech Holdings Limited, BridgeFort rebranded on June 13, 2022 and remodelled the business.
ZSE revealed this week that BridgeFort had applied for the voluntary termination of listing on the bourse.
“As required by section 64(1)(a)(i) of the Securities and Exchange Act [Chapter 24:25], ZSE sought and was granted permission by the Securities and Exchange Commission of Zimbabwe to delist BFCA.zw from the ZSE official list,” ZSE said.
When VFEX was established in 2020, it generated significant interest due to its various benefits.
These included tax breaks, such as no capital gains tax on the disposal of securities, a lower withholding tax of 5%, reduced trading fees, and the ability to raise capital in hard currency.
The incentives were particularly attractive to exporters, miners, and manufacturers, promising a 100% increment in value and international recognition due to the United States dollar listing.
Additionally, these advantages were seen as a potential solution to liquidity challenges on the bourse, which stemmed from a scarcity of listed companies affecting the number of shares and daily trading volume.
However, many of these benefits have since been removed, making the bourse less attractive.