BOTSWANA – Zimbabwe’s largest seed maker Seed Co Limited has partially reduced its operations by the primary listing of Seed Co International on the Botswana Stock Exchange (BSE).
The seed company will also get a secondary listing on Zimbabwe Stock Exchange (ZSE), its mother country as it targets to increase visibility on both the local and regional market.
According to the company, ZSE listing will involve issuance of 379 331 127 ordinary shares of no par value while entire of its issued share capital comprising 379 331 127 ordinary shares will be listed on BSE.
A circular by the company indicated that the unbundling of 71% of Seed Co International represented by 242 million ordinary shares was approved by shareholders at the company’s annual general meeting.
On completion of the transaction through a placement of Seed Co International Shares with Vilmorin & Cie SA, Seed Co Limited will retain 26% in Seed Co International.
“On the local stock exchange, as you know, we already have Seed Co Limited that is listed, but we are going to have Seed Co International.
We are going to have a primary listing of the unbundled entity to be listed on the Botswana Stock Exchange with a secondary listing on the Zimbabwe Stock Exchange,” said group chief executive officer Morgan Nzwere in August.
“We will now be able to do a lot of things that we were not able to do in the region because of funding, because obviously if we raise the funds here in Zimbabwe, with the United States dollar shortages, it will be a challenge to get the funds out…but, going forward because we will be able to raise these funds in Botswana, we will now be able to do the various projects that are listed in the prospectus,” he noted.
Regional expansion and growth
The unbundling and partial listing will result in the company raising US$19.22 million in capital to be used in investments and fund other expansion opportunities in the region.
The capital raised will be directed towards satisfying regional market acquisitions and capex programmes in Tanzania, Nigeria, Zambia, Botswana and Kenya.
It also seeks to unlock and preserve shareholder value while providing direct geographical portfolio choice for investors.
Seed Co which has operations in Botswana, Kenya, Malawi, Nigeria, Rwanda, Tanzania and Zambia, is seeking to raise US$31 million in funding in expansion projects.
The listing gives it momentum in growing its market share in key markets such as East Africa where adoption of the hybrid variety is on the rise as well as input programmes in Zambia, Zimbabwe and Malawi.
In a trading update from March, global winter cereal sales of 6 840 tonnes were recorded compared to the 7 053 tonnes achieved in the prior year, a decrease of 3%.
Overall gross profit for winter cereals stood at 42% up from 26% achieved in the prior year pushed by higher sales of certified seeds.