The Seed Co Group has moved to abandon plans to bring Seed-Co Limited (SCL) under the broader entity – Seed Co International (SCIL) – after failing to get all the regulatory approvals.
The transaction would have seen the Zimbabwean subsidiary shifting to the US dollar-denominated Victoria Falls Stock Exchange (VFEX).
But the abandonment means SCL will resume trading on the Zimbabwe Stock Exchange (ZSE).
Shareholders approved the transaction earlier in March, but the External Loans and Exchange Control Review Committee turned down the proposal that same month, as well as an appeal on June 8.
“Approval for the transaction was declined by the External Loans and Exchange Control Review Committee on 26 March 2021. An appeal against the decision was made on 7 April 2021 and the External Loans and Exchange Control Review Committee upheld the decline decision on 8 June 2021.
“Pursuant to this adverse regulatory decision, SCIL and SCL have no option but to abandon the contemplated consolidation transaction and revert to status quo,” said SCL and SCIL in a joint statement.
“Considering this major development and the ZSE’s Public Notice of 24 February 2021 advising the market of the stoppage in the trading of SCL shares, SCL applied and was granted permission by the ZSE to resume the trading of its shares on the official main board of the ZSE with effect from Monday 21 June 2021. Accordingly, caution is no longer required to be exercised by shareholders when dealing in the securities of both SCIL and SCL.
“Going forward SCIL and SCL will continue to operate as two separately listed companies that are related in so many ways and will utilise a Group Shared Services Unit to harness synergies to the extent possible and permissible by laws, regulations, and best corporate governance practices.”
SCL last traded on the ZSE with a price of $21,6 a share.
If successful the merger would have marked a complete turnaround from the group’s 2018 unbundling of the Botswana Stock Exchange-listed Seed-Co International, which is secondarily listed on the VFEX.