The Sunday Mail
Business Reporter
Powerspeed shareholders last week unanimously voted for the de-listing of the company from the Zimbabwe Stock Exchange (ZSE) through voluntary termination.
The shareholders voted that the company be authorised to purchase its own ordinary shares from minority shareholders.
The company has a total of 425 757 779 issued shares, of which only 68 293 626 shares (approximately 16 percent of issued shares) are held by approximately 1 100 minority shareholders outside of the top 20 shareholders.
A total 384 438 929 are earmarked for repurchase.
Powerspeed, which was originally a light engineering business focused on the electrical sector, but now dominated by the Electrosales retail operation, said it had decided to de-list because its listing on the ZSE has very little benefit yet it comes at a considerable cost.
It added that the lack of capital from institutional investors means that the listing has limited value in terms of a mechanism to raise capital and ongoing legal, compliance, and audit costs impede shareholder returns.
“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,” the company said.
“In the face of a difficult trading environment the additional costs of being listed, with no compensating benefits, can no longer be borne by the company,” reads part of its circular to shareholders.
Powerspeed is hardly traded on the ZSE. In the past six months total ZSE trading, outside of the share buyback, has been under 0,23 percent, on an annualised basis, of the total shares in issue.
The company expects to de-list today.
Following the vote to go ahead with de-listing shareholders wishing to exit Powerspeed will be offered $1,90 per share, the trading price when the circular was issued towards the end of November 2020.
As part of the de-listing process, the company said the ongoing share repurchase will be done on a dynamic basis, with pricing communicated through the OTC broker and aligned to the real net asset base of the Company at the end of the previous month.
Powerspeed has committed to publishing, on a quarterly basis, a price at which it will purchase shares on the OTC market.
Imara Edwards Securities (Private) Limited has undertaken to provide an OTC trading platform to Powerspeed shareholders and the investing public following the termination of the listing on the ZSE.
Powerspeed runs one of the biggest hardware stores in the country. The business consists of 19 retail stores covering a total floor space of 13 405 square metres in urban centres throughout Zimbabwe. An engineering division carries out repairs and maintenance of electric motors and other equipment. Powerspeed also earns rental income from its property portfolio.
