Stalap to push for CFI rights issue

Happiness Zengeni and Kudzanai Sharara
Zimre Holdings Limited (ZHL) through its investment vehicle Stalap Investments will forge ahead and propose a rights issue while at the same time it called on the Zimbabwe Stock Exchange to implore Messina Investments to formalise a ‘live’ offer it made to the public.
This comes as the ZSE through its chief executive said that Messina Investments which is controlled by Nicholas Van Hoogstraten had failed to show it evidence that it had surpassed the 35 percent threshold required to make an offer to minorities.
The Securities and Exchange Commission also opened investigations into Messina Investments conduct following the publishing of an offer to minorities by the holding company.
In a July 28 letter to the ZSE seen by this publication, Stalap through its stockbrokers FBC Securities said that an offer by Messina is required to formalise what is already a “live” offer which has been published in the public domain.
The group said that a formal offer would remove resultant shareholder confusion and serve to protect minority shareholders. Further it would remove any market distortions and deter the prevailing information asymmetry on the company and its shares.
Speaking to Business Weekly, ZHL major shareholder Hamish Rudland said the rights issue will go ahead as the company badly needs recapitalisation. Rudland singled out the milling businesses Agrifoods and Victoria Foods as well as Farm and City as subsidiaries that badly needed working capital.
“We need to boost working capital for Farm and City ahead of the 2017/18 farming season,” said Rudland.
Rudland’s comments come in the wake of news that the company did not receive a single share for its mandatory offer to minority shareholders.
“Due to unanticipated increases in the market price of CFI shares above the offer price, we have not received any shares on this mandatory offer,’ said CFI in a statement.
As expected the mandatory offer became academic after the trading price on the ZSE of 51.03 cents as at the close of the offer on August 4, 2017 made a mockery of the mandatory offer of 22 cents.
However, analysts who spoke to Business Weekly, said huddles still lie ahead as a proposal for a rights issue requires a special resolution of at least 75 percent for it to go through.