LISTED manufacturer and distributor of agro implements Zimplow Limited is seeking shareholder approval to increase its shareholding in Tractive Power Holdings Limited (TPHL) to 100% to enable it to unlock value for shareholders through the diversification of products. Report by Victoria Mtomba Business Reporter
Zimplow currently has a 57,21% shareholding in TPHL.
The company’s shareholders are expected to approve the takeover at an extra-ordinary general meeting that will be held on January 14.
If shareholders approve the transaction TPHL will delist from the Zimbabwe Stock Exchange.
TPHL has four operating units that include Northmec Zimbabwe, Farmec, Puzey&Payne and Barzem.
“By merging with TPHL, Zimplow will be able to position itself within this segment and benefit from the anticipated growth in demand for engine-drawn implements consequently consolidating the company’s position in the agricultural sector,” Zimplow said in a notice to shareholders.
“The merger will also enhance Zimplow’s participation within the mining sector through exposure to Barzem Enterprises Pvt Ltd, to further diversify its revenue stream and thus to some extent, smoothen the seasonal sales pattern the company experiences.”
Under the proposed transaction Zimplow is offering shareholders of TPHL 191, 78 new Zimplow shares for every 100 TPHL ordinary shares held, with cash alternative of $0,10 for each TPHL ordinary share held.
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Fractional entitlements will be rounded to the nearest whole Zimplow share.
Zimplow said the acquisition was undertaken on the basis that there was potential for the company to create value for shareholders through product and market diversification within the mining and agriculture sectors.
The two sectors are expected to be at the centre of Zimbabwe’s economic resurgence.
“To achieve this end, your board has been involved in various discussions with the board of TPHL the outcome of which has demonstrated that the best way to unlock value for the shareholders of both Zimplow and TPHL, is for the two business interests to merge,” Zimplow said.
The company will also be seeking shareholder approval for the change of name from Zimplow Limited to Zimplow Holdings Limited and the appointment of three new directors to the board.
