Crocodile company swims onto Zimbabwe Stock Exchange

The Zimbabwe Stock Exchange (www.zse.co.zw) snapped up its first new listing since 2007 on 29 November when Padenga Holdings Limited was admitted as the 77th listing. This year there have been 2 listings described as “reverse takeover listings”, TN Financial Holdings Ltd acquired Tedco Limited (January) in order to get listed on the ZSE and Interfin Holdings took over CFX Financial Services (May) and with it CFX Bank.
First day trading in Padenga was reported at 2.7 million shares, of which 1.8 million were book-overs by Imara Asset Management. The highest offer was US$7 cents, but trade opened at US$5c.
Padenga was created in September when diversified manufacturing conglomerate Innscor divested of its crocodile skins division Niloticus operated as a wholly-owned of Innscor, a, which has diluted its shareholding in the company from 100%. Innscor transferred assets and liabilities of its former subsidiary to the new public company in exchange for 541,593,440 of Padenga’s issued ordinary shares. These are to be distributed to Innscor shareholders by way of a dividend in specie, which technically means acquisition by way of share swap in lieu of cash distribution.
It has 3 farms in Kariba and supplies about 33% of the world’s demand for large, high-quality crocodile skins. It earns 92% of its revenue from tannery exports to Asia and Europe and 8% from meat shipments to Asia. Its main clients include leading global brands such as Gucci. Padenga in its prelisting statement (Padenga prelisting statement online, click here) reported that gross turnover up at $11.8 million for the year to 30 June (up from $10.2 million in 2009) and operating profit before depreciation and amortization of $1.3million (up from $69,879). The company is well covered by the excellent www.africanfinancials.com and www.africanir.com.
Padenga CEO Gary Sharp was reported in local media: “I am extremely optimistic about the opportunities that the listing brings us in terms of our intentions to grow the business and pursue related ventures using the experience, skills and IP (intellectual property) we have developed locally.
“We are now producing a size and quality of skin that commands premium prices and this largely separates us from the level of the market that is impacted by global market trends and fluctuating skin prices. We are predicting sustained revenue and profit growth over the foreseeable future and have every confidence in achieving these results.”
The global financial crisis had a negative impact on the international exotic skins market as both demand and prices declined. Subsequently, the company had to de-stock, which resulted in the business incurring a fair value loss during the financial year.
Another rumoured listing could be LonZim Plc, a 24.61% associate company of AIM-listed Lonrho, which announced on 29 November that it has raised £4,987,904 (before expenses), by issuing 17,813,944 new ordinary shares of £0.0001 each at 28p per LonZim share. This was principally conducted amongst new and existing institutional shareholders in LonZim. Lonrho participated to maintain its percentage shareholding of 24.61% by subscribing for 4,384,011 new LonZim Shares at a cost of £1,227,523. It is reported to be aiming to raise a further US$5 million for capital expenditure through a rights issue, with all funds to go to expanding existing operations.
On 2 November it was reported that Whetstone Minerals, listed on Canada’s Toronto Stock Exchange and concentrating on gold mining in Zimbabwe, was seeking a secondary listing for its shares on the ZSE, and this is reported still to be coming this year.
ZSE CEO Emmanuel Munyukwi was reported as saying also that Kingdom Financial Holdings would be one of 3 new listings (including Padenga) before the end of the year. He said several foreign companies had inquired about listing on the bourse.

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