ZIMBABWE Stock Exchange (ZSE)-listed Lifestyle Holdings is seeking shareholder approval to raise capital offshore as the furniture retailer and fast-food chain group plans to delist from the local bourse, the company has said. Report by Bernard Mpofu
According to a scheme of arrangement proposed to shareholders, the company plans to seek funds from Mauritius after it became apparent that local investors had no capacity to raise the much needed capital.
Shareholders are expected to convene for an extraordinary general meeting on March 15. It could not immediately be established how much the group was seeking.
“Lifestyle requires capital to sustain its furniture business and expand its fast-food division,” reads the notice.
“Its effort to raise capital on the Zimbabwean market have not yielded any results because of lack of long-term funding in Zimbabwe.
“Efforts to raise capital on the international markets have also proved fruitless as international investors have refused to invest citing the Zimbabwean sovereign risk.
“To manage the sovereign risk, directors of the company on December 19 2012 incorporated TN Harlequin Luxaire International Limited (TNHLI) in Mauritius, which company it is proposed would acquire all the issued shares of TN Holdings Limited (now Lifestyle Holdings).
“TNHL would then raise capital for the group on the international market.”
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Critics within and outside the government say Zimbabwe’s debt overhang and anxiety over the implementation of the indigenisation and empowerment policy has discouraged capital inflows.
Official figures show that companies trading on the ZSE raised $126 million through rights issues or private placements in 2011. The proposed scheme according to the statement, also involves the offer to issue TNHLI ordinary shares to shareholders of the company in exchange for their shares in the company.
“The implementation of the scheme will result in the company becoming a wholly-owned subsidiary of TNHLI and members of the company will receive in return for their shares in the company, shares in TNHLI, or alternatively, payment in cash in respect of such shares . . .The company shall, subject to the approval of the Zimbabwe Stock Exchange, cease to be listed on the ZSE,” the company said.
