Quick restaurants service (QRS) group – Simbisa Brands Limited – is expected to complete listing process on the Victoria Falls Stock Exchange (VFEX) beginning of December this year after delisting from the main bourse.
The group has targeted December 2, 2022 as the date for completion of listing on the USD denominated exchange. This will come after delisting from the Zimbabwe Stock Exchange (ZSE) on November 28, 2022.
The migration to VFEX is expected to help the group raise working capital for the fast food chain which has a lineup of expansion projects for the next two financial years.
Currently, the Zimbabwe operation continues to generate all its foreign currency from the sale of its products in the local market in line with the multi-currency framework prevailing and therefore does not have access to the Reserve Bank of Zimbabwe (RBZ) foreign currency auction system.
In a circular to its stakeholders, Simbisa indicated listing on the VFEX will among other benefits cushion the group from exchange control risks as well as enjoy tax incentives on the bourse.
“The benefits of the proposed transaction include, but are not limited to, the following: capital markets deepening through a broader shareholder base and ability to raise capital in foreign currency; offshore settlement allowances lowering exchange control risks; lower trading costs of 2,12 percent compared to 4,63 percent on the ZSE may improve the shares’ liquidity; tax incentives for shareholders including a 5 percent withholding tax on dividends and no capital gains tax on share disposal,” said Simbisa.
Additionally, the group will benefit from enhanced local and international profile amongst the public and investors as well as a provision of a de-facto third-party USD valuation.
However, in the event that the proposed transaction does not take place, then Simbisa will remain listed on the ZSE. Experts in capital markets say Simbisa’s migration to VFEX will also enhance liquidity on the exchange.