AGRO-INDUSTRIAL concern Interfresh Limited shareholders have voted in favour of delisting from the Zimbabwe Stock Exchange (ZSE) by year end as the company intensifies its capital hunt.
By Bernard Mpofu
After failing to raise $6 million from existing shareholders through a rights offer, Interfresh directors resolved to exit the ZSE on the back of liquidity constraints.
Speaking to journalists on the sidelines of the meeting, company chief executive officer Lishon Chipango said shareholders would consider relisting on the local bourse within the medium term.
The delisting means that the company’s shares will not trade on the ZSE, but the trading will be by private valuation and agreements between buyers and sellers and may still be arranged through stockbrokers.
“We expect the $6 million to be a blend of equity, convertible debt and some structured instruments so the dilution tends to be much less than that of a rights issue,” Chipango said.
In a notice for the extraordinary general meeting of shareholders, Interfresh board chairperson Chipo Mtasa last month said the company’s shares had been trading at a discount to net asset value of the company and other valuation methods. She said raising equity capital at current valuation had proved limiting.
“Only $3 million was raised through the July 2013 rights offer. The company does not have significant borrowing capacity which can be achieved at reasonable cost. The company needs to raise equity capital and convertible debt from private equity and structured finance markets using valuation methods other than the stock market,” Mtasa said.
Due to capital constraints on the domestic market, existing shareholders were diluted by 75% during the capital-raising initiative. Mtasa said the company would relist at an appropriate future date in the medium term.
Interfresh shares last traded on the ZSE on November 13 at 1,5 cents. Less than 30 000 shares were sold at a value of $214.
Interfresh is an agricultural, horticultural, agro-industrial and allied food product company and has since dollarisation relied on debt to finance its operations.
In a statement giving the rationale of raising shares from existing shareholders, Mtasa said the loss of 1 600 hectares of Mazoe Citrus Estates (MCE) land to the Ministry of Lands had affected the company.
The company accessed a short-term bridging loan facility of $1,25 million for working capital from IceJay Investments.
Mtasa said the allocation of part of MCE by government had led to a default which made the loan and all accrued interest immediately payable.
Interfresh joins the growing list of erstwhile heavyweights that have been struck off the ZSE register due to several factors ranging from weak corporate governance to underfunding.
The counter becomes the fourth company to delist from the local bourse after Caps Holdings, Lifestyle Holdings and Trust Holdings.
A total of five counters have been suspended from the ZSE since 2009 — namely Celsys, Chemco, Interfin, Phoenix and Trust Holdings — after they failed to meet the requirements of the local bourse.