National Foods delists from Victoria Falls Stock Exchange, starts transition to private held entity

ZIMBABWE – National Foods Limited, Zimbabwe’s largest food manufacturer, has become the first company to delist from Zimbabwe’s Victoria Falls Stock Exchange, which trades exclusively in US dollars.

The company said it no longer requires capital from equity markets in the near term, reducing the advantages of maintaining a VFEX listing.

In a circular, National Foods further explained that delisting would allow it to concentrate on long-term objectives and redirect spending on substantial regulatory and compliance expenses to initiatives more closely aligned with its needs.

Ahead of the delisting, expected to be concluded in early 2025, National Foods has offered to buy back 20% of shares from minority holders for about US$23 million. The offer opens on December 20 and closes on January 17, 2025.

“This move allows shareholders who prefer not to hold private shares in National Foods to exit their investments prior to the delisting. Following the completion of the offer, National Foods will proceed with the delisting, thereby transitioning to a privately held entity,” it said.

The company has two major shareholders: Innscor Africa Limited (37.45%) and Tiger Brands (37.45%). The delisting will also grant the company “increased flexibility” to streamline operations and concentrate on long-term strategic objectives.

National Foods is involved in flour and maize milling and cereal production, as well as projects in groceries, snacks and treats, and cooking oil manufacturing.

The broad range of basic foods includes maize meal, flour, rice, salt, snacks, biscuits, pasta, sugar beans, baked beans, popcorn, and a full range of animal feed. Recently, a maize-based cereal has been added to the National Foods product portfolio.

Reputable brands under its portfolio include Gloria Flour, Pearlenta, Red Seal and Better Buy mealie-meal, Mahatma and Mama Africa rice, Allegros Popticorn, ZapNax, and Active Nutri-Smart instant porridge, among others.

National Foods has manufacturing sites in Harare and Bulawayo from which it distributes its products throughout Zimbabwe.

The manufacturer, founded in 1920, switched its listing to VFEX from the Zimbabwe Stock Exchange located in the capital Harare, which trades in local currency, two years ago.

Launched in 2020, VFEX permits listed companies to raise funding in foreign currency and offers tax incentives. It has 15 counters and a market capitalization of US$1.3 billion. All the companies that migrated to the VFEX said they are lured by incentives on the foreign currency-only bourse.

VFEX trading costs are 2.12%, lower than the 4.63% prevailing on the Zimbabwe Stock Exchange (ZSE). Foreign shareholders have a 5% withholding tax on dividends compared to a withholding tax of 10% for non-resident shareholders on the ZSE.

Listing on the dollar-only bourse grants companies access to offshore settlement, which allows for efficient dividend repatriation for foreign shareholders. Firms listed on the ZSE have been struggling to repatriate dividends to foreign shareholders due to a dollar crunch in the economy.

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