HARARE – Horticultural concern Interfresh Limited (Interfresh) plans to delist from the Zimbabwe Stock Exchange (ZSE).
The group, intending to relist in the medium-term after “aggressive restructuring”, said its stock is not reflecting true value on the local bourse as it has “consistently traded at a discount to net asset value of the company and… other valuation methods.”
The transaction — subject to shareholder approval at a December 11, 2013 extraordinary general meeting — will be with effect from year end.
Interfresh said after delisting, it planned to raise $6 million capital through convertible debt from private equity and structured finance markets, using valuation methods other than the stock market.
“Raising capital at the current valuation has proved rather limiting. The company does not have
significant borrowing capacity which can be achieved at reasonable cost,” it said, adding that only $3 million was raised a few months back.
In July, Interfresh embarked on a $3 million rights issue with the funds earmarked to recapitalise operations and retire debt.
The group’s voluntary departure from the bourse comes as it disposed of its head office and lost part of its strategic land — Mazoe Citrus Estate (MCE).
Early this year, government — through the Lands ministry — acquired 46 percent of MCE’s arable land and allocated it to an unspecified party.
“This portion of land represents…. 30 percent of its (Interfresh) budgeted revenue for the financial year 2013 and 52 percent of the value of immovable and biological assets,” said Tawanda Namusi, Interfresh’s company secretary then.
However, market observers contend that due to these developments, Interfresh had no option but delist.
“Over the years Interfresh has been facing challenges. The disposal of its head office and loss of its land seriously depleted its balance sheet in a big way,” said one analyst who preferred anonymity.
“This has a significant impact on their share price. The business is hinged on land and they lost a significant and attractive piece of it,” the analyst said, adding that “they should have de-listed way back. It was long overdue.”
Meanwhile, Interfresh said post delisting, it will remain a public company while trading of its shares will be by private valuation and agreement between buyer and seller.
The group will also discontinue publication of its financials.
Interfresh, which is in the business of producing, processing and marketing agricultural, horticultural, agro-industrial and allied food products in both the local and export markets, has since dollarisation in 2009 not been adequately recapitalised but relied on debt financing to sustain its operations.
In 2011, the company — which has three strategic divisions namely, Citrus, Flowers and Trading — secured a $5 million six-year loan to fund both capital expenditure and working capital.