ZSE approves African Sun delisting
THE Zimbabwe Stock Exchange has approved the exit of African Sun Limited following the company’s announcement that it is moving to the Victoria Falls Stock Exchange (VFEX).
The hotelier is expected to discontinue its trade on ZSE on 31 March this year and complete its listing on the foreign currency bourse on 14 April 2023. Like all the companies that moved from the Zimdollar market to VFEX, the group seeks to gain access to US dollar capital which is offered on the Victoria Falls market.
Company chairperson Emmanuel Fundira said the African Sun board believes that migrating to the VFEX will bring significant benefits to both current and potential shareholders.
He said US dollar capital is important for hotel assets and projects that require foreign currency for execution.
“African Sun, being a business in the tourism industry, is expected to generate USD revenue. As a result, shareholders and investors would expect the business to be valued in USD with the ability to generate USD dividends and USD proceeds on disposal of shares,” he said.
Withstanding the devastating impact of the Covid-19 pandemic, international and domestic tourism recorded a resurgence in the 2022 fiscal year.
Fundira said the board approved of the delisting to maintain the momentum and ensure the longevity of the industry while evaluating strategies to drive growth and increase shareholder value.
“Generally, listing on the VFEX will allow African Sun to gain access to a favourable exchange control regime that appeals to international investors,” he added.
When the group lists on VFEX, African Sun would be able to trade shares and repatriate both their capital and dividend earnings in foreign currency.
“This feature is crucial for offshore investors who are looking to make long-term investments, as it addresses a key concern regarding the current ZSE listing,” said Fundira.
Furthermore, he said the migration would enable the group to have access to a source of capital that is aligned with its developmental needs.
Onother favourable condition attracting securities to the VFEX market is a lower share-trading costs, with fees of 2.12% compared to the 4.63% charged on the ZSE.
The successful listing of African Sun Limited on the US dollar-indexed bourse will bring the number of securities listed on VFEX to nine.
Zimbabwe’s largest hospitality group operates 10 hotels, including internationally recognised brands.
In 2021, the group merged with Dawn Properties Limited as part of a strategy to create a sound balance sheet that supports the company’s ability to raise capital to fund various hotel refurbishment and expansion projects.