ZIMBABWE – Seed Co Limited, Zimbabwe based producer and marketer of certified crop seeds is seeking to raise upto US$19.2 million through a partial unbundling to support expansion as well as separate listings of its regional operations.
The Herald has reported that Seed Co wants to unbundle 71% of Seed Co International represented by 242 million ordinary shares and the transaction approval will be determined at its annual general meeting to be held next month.
Once approved, Seed Co Ltd plans to retain 26% stake in Seed Co International, with the funding from the transaction going to expansion projects that require immediate funding to the tune of US$31 million.
Half of the required amount will be mobilized as permanent equity through the placement of 37 920 648 Seed Co International ordinary shares for subscription by the French seed producer, Vilmorin & Cie, at a subscription price of $0,5069 per share.
“In view of the hard currency funding needs of the group’s regional growth trajectory and the need to unlock, preserve, and grow shareholder value, the directors are proposing to partially unbundle through a dividend in specie, and separately list on the BSE the group’s regional operations which are held through Seed Co International.
“The proposed separate listing of the Seed Co International will be preceded by a capital raise of US$19.22 million through a placement of Seed Co International Shares with Vilmorin & Cie SA, a related party, which capital raise is meant to address the short to medium term funding needs of the regional operations,” said the company in a circular.
According to the seed producer, the proposed transaction is meant to mobilise capital, defend the investment already deployed in the region and fund other expansion opportunities, through a structure that will also unlock and preserve shareholder value while providing direct geographical portfolio choice for investors.
Seed Co has operations in Botswana, Kenya, Malawi, Nigeria, Rwanda, Tanzania and Zambia and the group expects to maintain the growth momentum pushed by anticipated further market share growth in key markets particularly the East Africa with adoption of the hybrid variety on the rise in that region as well as input programmes in Zambia, Zimbabwe and Malawi.
“If approved by shareholders, the private placement will have a dilutive effect of 10% to the post partial unbundling shareholding structure of Seed Co International.”