Online Reporter
Business Reporter
SHAREHOLDERS of National Foods Limited voted on Wednesday to voluntarily delist from the Victoria Falls Stock Exchange (VFEX).
The special resolution was passed during an extraordinary meeting.
The delisting is expected to provide the company with greater flexibility to streamline its operations and focus on its long-term strategic objectives.
In addition, the group said it no longer required capital from public equity markets in the near term, reducing the advantages of maintaining a VFEX listing.
Another special resolution which got a nod was on share buyback.
The company said the share repurchase offer provided an opportunity for shareholders to access the full value of their shares and address the liquidity constraints associated with the shares’ limited trading activity on the VFEX
Share repurchase is usually an indication that the company’s management believes the shares are undervalued. The company can buy shares directly from the market or offer its shareholders an option to tender their shares directly to the company at a fixed price.
Because a share repurchase reduces the number of shares outstanding, it increases earnings per share and tends to elevate the market value of the remaining shares.
The agro-processing firm became the ninth listing on the foreign currency-denominated VFEX when it migrated from the Zimbabwe Stock Exchange (ZSE) in January last year.
National Foods has manufacturing sites in Harare and Bulawayo from which it distributes its products throughout Zimbabwe.
National Foods, a subsidiary of Innscor Africa, is Zimbabwe’s largest food manufacturer and produces snacks, biscuits, pasta, sugar beans, baked beans, popcorn, as well as soap and a full range of animal feed.
