Powerspeed shareholders okays delisting

Author Name
Respect Gwenzi
Markets 4 months ago
  • Shareholders voted to cut ties with the ZSE at an EGM
  • The company had previously lamented that their listing was no longer beneficial
  • The company will now proceed to buy back shares from minority shareholders

The shareholders of electrical and hardware supplier, Powerspeed Electrical limited have approved a proposition to delist from the local bourse on the basis that it is no longer beneficiary for the company.

At an Extraordinary General Meeting (EGM) held on the 14th of December 2020, the decision that the company’s shares be voluntarily terminated from the main board of the Zimbabwe Stock Exchange (ZSE) was unanimously accepted.

The company will now proceed to purchase back its own ordinary shares from minority shareholders at ZWL$1,90 per share.

The company has a total of 425,757,779 issued shares, of which only 68,293,626 shares, amounting to about 16% of the total are held by approximately 1,100 minority shareholders outside of the top 20 shareholders.

Powerspeed’s board chairman, Simba Makoni said that the rationale for this delisting was that there was not much activity on the ZSE and that the listing had attracted any meaningful investment for the company in a while.

“In the past six months total ZSE trading, outside of the share buyback, has been under 0.23%, on an annualised basis, of the total shares in issue,” the chairman reported.

“While one of the often-cited benefits of a stock exchange listing is the ability to easily raise new capital, this is clearly not the case for Powerspeed. Foreign investors previously active on the ZSE have seen significant real losses in the last 18 months following currency weakness and, more importantly, an inability to remit proceeds on disinvestment. This unprecedented crisis is likely to remain an obstacle to attracting new capital through the ZSE for the foreseeable future,” he added.

Powerspeed joins FalGold which delisted from the local bourse on the 10th of November 2020 due to operational hurdles and Zimbabwe Property Investments (ZPI) which also delisted on the same day following and acquisition by Zimre Holdings Limited.

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