Bridgeford Capital seeks stability in VFEX listing
PRIVATE equity firm BridgeFort Capital Limited says it remains dedicated to its planned listing on the Victoria Falls Stock Exchange (VFEX) and finalising a deal with Diaspora Kapita as it is according the two moves their full attention.
In its 2023 annual report, the Zimbabwe Stock Exchange-listed company highlighted the risks of raising capital during inflationary periods, citing the extended processes involved and the erosion of real value due to inflation over time.
It noted that acquisitions would likely be settled primarily, if not entirely, in shares given the current inflationary climate, although vendors might view this unfavourably, potentially constraining the company’s growth through acquisitions.
In response to these concerns, the company deemed a VFEX listing a feasible alternative.
“The company is pursuing the listing of both classes of shares on the Victoria Falls Stock Exchange simultaneously with the conclusion of a transaction with Diaspora Kapita.”
Added BridgeFort chief executive officer, Vernon Lapham in his report: “Our current focus is on the move of the listing to the Victoria Falls Stock Exchange and concluding a transaction with Diaspora Kapita.”
The transaction with Diaspora Kapita Proprietary Limited involves BridgeFort acquiring a predominantly South Africa-based business from it.
Formed in 2014, Diaspora Kapita is an investment company engaged in contract mining, financial services, fintech and agriculture.
Formerly MedTech Holdings, Bridgefort is a manufacturing, retail, distribution and services company in Zimbabwe.
The company operates in three market segments; fast-moving consumer goods, medical supplies and manufacturing of light industrial products.
The FMCG division manufactures and markets personal care products, and the medical division produces pharmaceutical products for wholesale distribution to retail pharmacies.
Meanwhile, the listed firm praised the Government for controlling money supply growth and eliminating quasi-fiscal activities.
It said the move has brought about exchange rate stability since the introduction of the new currency, the Zimbabwe Gold (ZiG).
“The introduction of ZiG on April 5, 2024 accompanied by a commitment to control money supply and eliminate quasi-fiscal activities has seen a significant improvement in exchange rate stability.”
The central bank recently introduced the ZiG as part of a raft of policy interventions to address exchange rate volatility, curtail inflation and restore macro-economic stability.
The new currency is backed by precious minerals, mainly gold and foreign currency reserves.
In the period under review, MedTech sales declined by two percent while gross profit declined by 16 percent due to a reduction in higher margin distribution sales and an increase in manufactured products at a lower margin.
In terms of income statement performance as measured by the change in the equity value in USD, MedTech incurred a loss of about US$260 000 with US$130 000 of this being attributable to the Class A Portfolio.
During the year under review, a payment of US$170 000 was received from the Reserve Bank for legacy debts, which provided some much-needed relief for MedTech and their suppliers.-chroncile
