Listed seed manufacturing giant, SeedCo International Limited (SCIL) has dismissed as false allegation of foul play after its recent decision to delist its local unit SeedCo Limited (SCL) from the Zimbabwe Stock Exchange (ZSE).
The remarks come shortly after asset management company, Imara which has been investing in SeedCo Zimbabwe for over 20 years on behalf of its clients raised concerns the de-listing was biased in favour of one shareholder, Limagrain.
Imara also alleged local investors would be sidelined and shortchanged as SeedCo’s local unit shares on the ZSE are worth US$100 million and risk being taken over by SCIL whose shares are worth US$70 million.
The asset management company also claimed it will be impossible for Zimbabwe pension funds and private individuals with no access to foreign exchange to buy US$ shares after SCIL’s listing on the Victoria Falls Stock Exchange (VFEX).
However, in response to the allegations, SCIL said that local investors still have the opportunity to invest in US$ shares and stand the opportunity to derive lucrative benefits.
“The gazetting of Statutory Instrument 280 of 2020 (“SI 280″) which allows for payment of pension contributions and benefits and payment of insurance premiums and settlement of insurance claims in the USD currency, should result in improved activity on the newly created VFEX,” SCIL said.
The seed manufacturer said retail investors will soon start participating on the VFEX as more workers and informal players begin to receive part or all of their earnings in US$.
SCIL said allegations to the effect that the proposed transaction was designed to benefit only one shareholder, Limagrain, are misplaced because both SCIL and SCL shareholders are set to derive benefits through the harmonisation of synergies as well as the elimination of duplicated functions and associated costs.
The company said the swap ratio of one SCIL share for every 0.98 SCL shares held was arrived at using intrinsic valuations of the two companies.
“The valuations were reviewed by independent experts appointed by the boards of both SCIL and SCL, Grant Thornton and Deloitte respectively who both confirmed that the swap ratio was fair and reasonable to the respective shareholders they were representing,” SCIL said.
Whilst SCL owns most of the intellectual property, it was noted it was of little value if it is not leveraged to generate sales. The distribution footprint is also important whilst the technology still enjoys patent protection.
SCIL added that the de-listing was done in line with ZSE regulations and concluded that there was no illegality on the transaction.