National Foods cites reduced benefits of public listing following VFEX exit plan

National Foods Holdings Limited, Zimbabwe’s largest food manufacturer, has stated that its plan to delist from the Victoria Falls Stock Exchange (VFEX) is prompted by reduced benefits of maintaining a public listing.

The company cited limited trading activity on the VFEX, resulting in low liquidity, as a key reason for the proposed delisting.

In a circular to shareholders, National Foods explained that the delisting will grant the company increased flexibility to focus on long-term strategic objectives without the regulatory and compliance expenses associated with maintaining a public listing.

The company also noted that a significant portion of its shares, approximately 75.18%, is held by two major shareholders, limiting the influence and participation of smaller retail investors.

As part of the proposed transaction, National Foods will offer to repurchase up to 20% of its issued ordinary shares at a consideration of US$1.71 per share.

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The offer provides an opportunity for shareholders to sell their shares at a price reflecting their true value, addressing the liquidity constraints associated with the shares’ limited trading activity on the VFEX.

“The Offer provides an opportunity for Shareholders to sell their ordinary shares at a consideration of US$1.71 per share (‘the Offer Consideration’),” the company noted.

“This move allows Shareholders who prefer not to hold private Shares in National Foods to exit their investments prior to the delisting. Following the completion of the offer, National Foods will proceed with the Delisting, thereby transitioning to a privately held entity.”

The proposed delisting and share repurchase offer are subject to shareholder approval, with an extraordinary general meeting scheduled for December 18, 2024.