GetBucks outlines ZSE delisting reasons
GETBUCKS Microfinance Bank Limited has indicated that continued listing on the Zimbabwe Stock Exchange (ZSE) is now a burden to the firm as there are numerous requirements to adhere to at a time when it is battling to raise capital from institutional investors hence it intends to delist from the bourse.
The entity said fees and levies charged by ZSE that are based on the market capitalisation have also become onerous expenses for it.
ZIMBABWE Stock Exchange (ZSE)
Due to regulatory requirements and lack of capital, it is deriving little benefits from the listing and as such it wants to delist from the bourse.
The listed entity has scheduled a sixth Annual General Meeting (AGM) of the shareholders on August 31, to seek a nod for delisting. Results of the AGM are expected to be announced on September 4, with the de-listing of shares from the ZSE planned for September 5.
Last year, the financial service company indicated its desire to migrate the company’s shares listed on the ZSE to the US dollar-denominated Victoria Falls Stock Exchange (VFEX) in line with the firm’s recapitalisation plans.
The microfinance bank has been negotiating a US$5 million recapitalisation package to enable it to meet the required minimum capital threshold set by the Reserve Bank of Zimbabwe (RBZ).
However, in a circular to shareholders on Thursday, GetBucks Company Secretary Mr Muchineripi Chigwendere detailed reasons for planned voluntary delisting.
According to the circular, on 9 December 2022, the Board of Directors held a meeting where they considered the termination of GetBucks Bank’s ZSE listing.
The board is of the view that in the current environment in Zimbabwe, a listing on the bourse is accruing little benefits to the company while incurring considerable costs, he noted.
“Trading of the GetBucks Bank shares has not represented a realistic valuation as at the Last Practicable Date the Company was trading at ZWL 38,50 (thirty-eight dollars and fifty cents in Zimbabwe dollars) per share which represents a market capitalisation of $44,8 billion or twenty-nine (29) times the value of shareholders equity in the business as at 31 December 2022, a valuation that makes equity capital raising initiatives difficult,” reads part of the circular.
It added that the inability to raise capital from institutional investors means that the listing has limited value in terms of a mechanism to raise capital.
Therefore, in the face of a difficult trading environment, the Board decided to propose to shareholders its delisting from the ZSE.
Mr Chigwendere said GetBucks Bank has a total of 1 163 118 377 issued shares, of which only 373 704 shares (approximately 0.03 percent of issued shares) are held by approximately 498 minority shareholders outside of the top 20 shareholders.
Only three shareholders hold a stake of five percent or more, he said.
Mr Chigwendere said GetBucks Bank has previously sought to court strategic long-term equity investment into the business but however the valuation proved unrealistic and an impediment.
He added that ZSE has recently implemented new reporting regulations that have increased the issuance of shareholder reporting from semi-annual to quarterly. Further to this, Mr Chigwendere noted that raising capital on the ZSE has become an expensive undertaking because of the need to produce circulars to shareholders to facilitate capital-raising transactions. The circulars require input from professional advisors, the production of hyperinflation and Pro-forma accounts and carry a production and distribution cost, he said.
Mr Chigwendere said GetBucks Bank is a very illiquid stock and trading often does not represent a realistic valuation. -chronicle
