Alternative Investment Market-listed (AIM) firm Cambria Africa says it will proceed with a secondary listing on the Zimbabwe Stock Exchange after Celsys Limited shareholders approved a takeover by the company.
Celsys shareholders held a Scheme of Arrangement meeting on Monday and voted on an offer to receive Cambria shares in exchange for their Celsys shares or cash. Cambria already held 60% of Celsys.
Under the scheme, for 686 Celsys shares, shareholders will receive one Cambria share or for every one Celsys share a payment of 0,03c would apply.
The High Court will be presented with the new development on June 6.
“With approvals in place for the acquisition of the outstanding shares held by minorities in Celsys, Cambria will undertake to proceed with the listing on the Zimbabwe Stock Exchange (ZSE) over the coming period,” Cambria said.
The company will retain its primary listing on AIM.
According to Cambria, the rationale of the scheme was influenced by the need for a significant capital injection, estimated to be in excess of $5 million in the medium to long term.
The money would be for expansion plans as well as to consolidate the company’s market position and thereby earn commensurate returns for shareholders.
The initial expansion plans were primarily funded by Cambria through a shareholder loan of approximately $4,5 million, which remains payable to date.
“Given the local capital market conditions and historical trends, Cambria, a major shareholder in Celsys, is of the view that any equity-based funding will result in the unfair dilution of the minority shareholders,” said Cambria before the meeting.
It also said minority shareholders might not want to have additional exposure and risks associated with any debt-funding structure and Cambria was not prepared to accept the increased risks associated with providing meaningful additional debt to the company in its current ownership structure.
Cambria will become the first secondary listing of a European company on the ZSE since 1999, the first public listing of shares on the ZSE since 2010, and the second listing of shares on the ZSE since the adoption of the multiple currency system.
Celsys’ main business is the production of security documents such as chequebooks and share certificates, among others.
Other Cambria subsidiaries include Paynet, Leopard Rock, Millchem, CES Zim and ForgetMeNotAfrica.