Seed Co VFEX ambition back on track

ZIMBABWE’S biggest seed producer, Seed Co Limited will list on the Victoria Falls Stock Exchange (VFEX) after securing board approval to migrate from the Zimbabwe Stock Exchange (ZSE), officials said yesterday.

If the move materialises, the firm will join its sibling, Seed Co International, which became the first counter to list on the forex-indexed bourse when it started trading in October 2020.

Under a transaction that attracted significant market attention in 2021, Seed Co announced plans to list on VFEX, but its migration was blocked by regulators after a leading advisory firm raised the red flag.

But in regulatory filing with the ZSE yesterday, Seed Co said the VFEX listing plan was back on track after board approval, adding that further announcements would be made.

“Shareholders of Seed Co Limited and the investing public are advised that the board has approved the migration of the company’s listing from the Zimbabwe Stock Exchange to the Victoria Falls Stock Exchange,” the firm said in a statement.

“Accordingly, shareholders are advised to exercise caution when dealing in the company’s securities. Further announcements will be made in accordance with regulatory requirements as and when there are material developments.”

In June 2021, the Pan-African seed breeder returned to ZSE, about eight months after terminating trading to pursue the VFEX listing.

Under the deal, Seed Co will tie up with its Botswana Stock Exchange-listed offspring, Seed Co International Limited (SCIL).

The combined assets of the seed empire would then switch to VFEX.

The Reserve Bank of Zimbabwe turned down the proposal.

Seed Co group directors were at the time confident that a VFEX listing would give impetus to the firm’s growth ambitions because the new bourse trades in forex.

But the transaction raised the concern of Imara, one of Zimbabwe’s biggest advisory firms, which said it placed domestic investors at a disadvantage.

“We do not support that proposal as it would result in Seed Co Zimbabwe delisting from the ZSE,” Imara said at the time.

“For domestic investors based in Zimbabwe it will, therefore, not be possible to invest ZWL (Zimbabwe dollar) savings into the Seed Co group again; SCIL shares can only be bought in Botswana pula or on the VFEX for US dollars.

“Under current exchange control regulations, it will be onerous if not impossible for Zimbabwe pension funds and private individuals with no access to foreign exchange to do so.

“In our view this is a great shame.

“For existing domestic shareholders in Seed Co Zim, they would still have ownership of Seed Co Zim via SCIZ, but they would most likely never be able to acquire more shares in the group again.”

The advisory firm added: “It makes perfect sense for Limagrain, the major shareholder (in Seed Co).

“They have access to international capital and have no exchange control issues.

“Should Seed Co Zimbabwe be delisted and wholly acquired by SCIL, we would not be surprised to see Limagrain buying out the minorities of SCIL in the future, thereby denying African investors the opportunity to own such a successful company.”-newsday