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Zimbabwe: Powerspeed in Shock ZSE Exit

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Powerspeed  Limited is exiting the Zimbabwe Stock Exchange (ZSE) due to limited capacity to unlock capital, lack of realistic valuation representation, and high compliance costs among other issues.

The leading supplier of electrical, hardware and home improvement products announced the move in a recent circular.

In the circular to shareholders issued last week, the company’s board said it was of the view that in the current environment in Zimbabwe, a listing on the Zimbabwe Stock Exchange has very little benefit but had considerable costs.

“Powerspeed is a very illiquid stock and trading often does not represent a realistic valuation,” the circular reads.

“The lack of capital from institutional investors means that the listing has limited value in terms of a mechanism to raise capital and ongoing legal, compliance, and audit costs are an impediment to shareholder returns.”

The company announced that in the face of a difficult trading environment, the additional costs of being listed with no compensating benefits can no longer be borne.

Resultantly, Powerspeed has proposed to shareholders it’s delisting from the ZSE and at the same time, the ZSE has directed the company to provide a mechanism to shareholders wishing to exit their shareholding prior to the delisting.

“The coming into effect of the proposed delisting will be subject to the approval of the proposed delisting by a majority in number representing three-fourths by percentage (75%) of the shareholding of Powerspeed, present and voting either in person or by duly authorised proxy at the Extraordinary General Meeting to be held at the date,” said the circular.