Seed Co International Limited shareholders give nod to acquisition of Zimbabwean unit

ZIMBABWE – Regional seed producer, Seed Co International Limited (SCIL) has received the go ahead from its shareholders to acquire the entire shares of its Zimbabwean unit, Seed Co Limited (SCL).

After passing of the transaction, SCIL advised the investing public and shareholders that the company was now proceeding to tender the open market offer to acquire SCL’s entire issued ordinary shares through an announcement or offer circular to be issued to SCL in accordance with the Zimbabwe Stock Exchange requirements.

“Pending the successful conclusion of the steps outlined above (in the notice) shareholders and the investing public are advised to continue exercising caution when dealing in the securities of the SCIL,” the company said.

The seed producer commenced plans of the merger last year in a bid to make its secondary listing on the newly formed Victoria Falls Stock Exchange (VFEX) be more competitive and comparable to other Zimbabwean dual-listed counters.

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This came after the Zimbabwe Stock Exchange (ZSE) formed a new subsidiary, VFEX that will trade solely in foreign currency targeting companies in Zimbabwe and the Africa continent, before expanding across the globe.

SCIL reported a 57.3% rise in revenue in the half year period 2020

The establishment of the platform follows the Ministry of Finance and Economic Development of the Republic of Zimbabwe undertaking investigations relating to alleged participation in parallel foreign currency market activities by dual-listed companies in Zimbabwe.

The investigations noted that implied exchange rates were being derived from the comparison of dual listed share prices on the ZSE and other exchanges, and such implied rates were believed to be the leading indicators of speculative parallel foreign exchange rates in Zimbabwe.

In a bid to provide a permanent solution to the situation, the ZSE in consultation with the Ministry of Finance and Economic Development, established a subsidiary, the VFEX where dual-listed companies would be allowed to list their shares for trading in foreign currency.

Seed Co International became the first company to be listed on the new foreign currency denominated bourse.

The company reported a 57.3% rise in revenue for the half year period ended September 30, 2020 to US$27.9 million from US$17.7 million achieved in the prior year.

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It achieved a profit of US$2.5m making a turnaround from a loss of US$2.5m

Meanwhile, the producer of certified seed is targeting 10 percent share of the South African market, which will be achieved through its joint venture project with Limagrain and K2.

Since mid-last year, Seed Co’s operations in South Africa and eSwatini became part of the enlarged business entity, Limagrain Zaad SA, created from the merger of K2, Link Seed and Seed Co operations in these markets.

The company has revealed that it will take up a 20 percent stake in the joint venture project.

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