Axia shareholders give nod to VFEX listing
RETAIL and distribution group Axia Corporation Limited shareholders have approved the delisting of the company from the Zimbabwe Stock Exchange (ZSE) and the subsequent listing on the forex-denominated Victoria Falls Stock Exchange (VFEX).
In a notice to shareholders, the company revealed that three resolutions were passed for the company to delist from ZSE and list VFEX at an extraordinary meeting held last week.
“Shareholders are advised that all resolutions put to the vote at the extraordinary general meeting of shareholders of Axia Corporation Limited held on Thursday 2 February 2023 were passed,” the notice revealed.
The resolutions that were passed are the delisting of Axia Corporation Limited from the ZSE, listing of Axia Corporation Limited on the VFEX and the authorisation of directors to effect the resolutions.
The company said the reasons for the latest move include access to US dollar capital to assist in its capital expenditure, working capital requirements and regional expansion initiatives, free repatriation of dividends and proceeds from the disposal of shares through offshore settlement for foreign shareholders, favourable tax incentives for investors of zero capital gains tax and a 5% withholding tax for foreign investors to enhance shareholder returns as well as lower trading costs of 2,12% compared to 4,63% on the ZSE, which would enable Axia to make savings and retain more value for shareholders.
It said listing on the VFEX would also result in a US-dollar valuation of Axia, allowing shareholders to realise the true value of their holdings and provide a more accurate benchmark of the stock’s performance, while mitigating valuation volatility; enhancing the company’s regional profile and commercial standing; strengthening the company’s prospects for both local and regional expansion; and will ensure more efficient financial reporting through US-dollar denominated group financial statements, which will contribute to lower risk perception for the company as well as increasing the company’s leverage to access other forms of finance at favourable terms.
Axia will join Padenga Holdings Limited, Simbisa Brands Limited, SeedCo, Caledonia Mining Corporation, Bindura Nickel Corporation Limited and National Foods to list on the VFEX.
Flight of companies to VFEX comes at a time when the ZSE has become one of the worst-performing bourses in the region after the government put in place measures in May last year to rein in galloping inflation and curb volatility on the exchange rate. This includes a 40% capital gains tax on traders who dispose of shares in less than 180 days.
Capital gains tax is a levy on the profit that an investor makes from the sale of an investment such as shares.=newday
