NATIONAL Tyre Services Limited (NTS) has announced plans to voluntarily delist from the Zimbabwe Stock Exchange (ZSE) after more than five decades, citing prolonged financial strain from economic instability, high operating costs and persistently low share trading activity.
The announcement comes on the heels of the firm posting a loss of ZiG121,19 million during its financial year ended March 31, 2025.
This was after the firm returned to profitability in the prior comparative period, posting a profit after tax of ZiG67,48 million from a loss-making position in its 2023 and 2022 annual timeframe.
In explaining its loss for the financial year ended March 31, 2025, NTS reported that sales declined by 25%, resulting in revenue declining to ZiG143,35 million from a prior year comparative of ZiG191,73 million.
The proposed delisting continues a mass exodus of firms from the ZSE, which would bring the total number of listed entities to 37.
“Following a comprehensive review of the company’s listing status, market trading dynamics, and long-term sustainability, the board has resolved to seek shareholder approval for the voluntary termination of the listing of NTS on the Zimbabwe Stock Exchange,” NTS said in a circular to its shareholders.
“This decision has been reached after due consideration of various strategic, operational, and market-related factors.
“The objective of the proposed termination (the termination) is to reposition the company for greater flexibility, operational resilience, and sustainable growth in an increasingly dynamic economic environment.”
In conjunction with the termination, NTS’s third largest shareholder Radun Investments (Private) Limited has made an offer to acquire the shares from shareholders who do not wish to remain invested in an unlisted entity.
As of March 2024, Radun had a 12,29% stake in NTS after MBCA Nominees Private Limited (34,22%) and Group Five Companies Private Limited (28,48%).
“Radun is making an offer to acquire up to a maximum of 94 513 956 ordinary shares, representing 37,23% of the issued share capital of NTS (the offer),” NTS said.
“The offer presents an opportunity for minority shareholders to dispose of their shares at a cash consideration of US$0.0248 per share (the offer consideration).”
That means Radun is offering to pay US$2,34 million for the shares, with the firm securing US$2,5 million for the offer.
“This initiative enables shareholders who prefer not to hold shares in an unlisted entity to realise value and exit their investment in NTS ahead of the proposed termination,” NTS said.
“Upon the successful conclusion of the offer, the company will proceed with its voluntary termination and convert to a private company.”
NTS is one of Zimbabwe’s pioneer tyre companies and was listed on the ZSE in September 1969, engaging in the manufacture and importation of vehicle tyres.
However, the business has been adversely affected by the economy’s severe exchange rate volatility, liquidity constraints, shortages of foreign currency and optional imports, all of which have materially hindered the importation of tyres and raw materials.
“The Zimbabwean tyre industry has, in recent years, experienced heightened competition due to low entry barriers and the influx of imported brands, resulting in a loss of market share for the company,” NTS said.
“Limited access to long-term and affordable capitaI has also constrained the company’s ability to execute its expansion strategy and maintain adequate working capital levels.”
Despite efforts to secure funding through the local banking system, borrowing has remained prohibitively expensive.
“Operationally, NTS continues to face significant challenges.
“The current power supply deficits have disrupted production at the retreading factory, where capacity utilisation has averaged approximately 30%.
“Frequent electricity outages have negatively affected branch operations, resulting in estimated revenue losses of up to 40% of projected sales,” NTS said.
“Extended supply chains from Asia, where most tyre suppliers are located, have further strained the company’s liquidity by locking up working capital in goods in transit for prolonged periods.
“As a result, the company’s cash flow position has deteriorated, impeding its ability to meet mandatory obligations, including listing-related fees, statutory payments, and the replenishment of inventory.”
Consequently, the firm has been unable to declare dividends for over a decade.
The NTS board has also noted, with concern, what is describes is sustained illiquidity in the trading of its listed shares.
“Over the 12-month period ended July 31, 2025, NTS shares did not trade in eight out of the 12 months, and the average monthly trading volume was less than 3,5 million shares,” NTS said.
All these factors have led the firm to decide to delist from the ZSE in an extraordinary general meeting to be held on November 19, 2025.-newsda
