HARARE – Interfresh Limited (Interfresh) shareholders plan to raise at least $6 million in equity and structured funding following approval to delist from the Zimbabwe Stock Exchange at an extra-ordinary general meeting held yesterday.
This comes on the back of various challenges such as limited capacity to raise equity capital at current valuation and loss of part of its strategic land — Mazoe Citrus Estate (MCE) to compulsory acquisition by government among others.
Of the total 198 000 000 shares in issue, shareholders present for voting constituted 89, 31 percent representing 179 510 466 shares and all voted in favour of delisting on the local bourse.
“Delisting will facilitate access to funding from private equity and structured finance markets at reasonable valuations and that the much needed funding so raised would be effectively applied to stabilise and grow the company,” Interfresh’s chief executive Lishon Chipango told the media after the meeting.
He however added that they intended to “relist in the medium-term at an appropriate future date after aggressive restructuring and growing the business” adding that the conceptual framework of the stock market was that one of the benefits is in order to raise more capital.
“So the issue of questioning the benefits of being listed maybe we are the first down the road but I would be surprised if others follow suit…so there is really no capital to raise in Zimbabwe unless if it’s coming from external sources,” he said.
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.
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 to 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.”