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Shareholders urged to exercise caution with SeedCo ahead of ZSE exit

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By Alois Vinga 


SHAREHOLDERS have been urged to exercise caution when dealing with seed manufacturing giant, SeedCo Limited (SCIL)’s shares amid reports the firm was ordered to merge its subsidiaries and leave the Zimbabwe Stock Exchange (ZSE).

The firm’s shares were suspended from the ZSE in July 2020 after suspicions they were being used in parallel market rate fixing and externalisation of funds.

SCIL’s shares remain suspended as the government is determined to halt dual listed shares to avoid parallel market exchange rates hikes.

However, the ZSE has since announced investigations concluded that dual-listed companies, including SeedCo International Limited were not involved in activities on the parallel foreign currency market.

It was however revealed that implied exchange rates were being derived from the comparison of dual listed share prices on the ZSE and other exchanges and such implied rates were believed to be the leading indicators of speculative parallel foreign exchange rates in Zimbabwe.

As a result, the company is pursuing a merger exercise which is likely to have an impact on the shares which will result in merging the Zimbabwean operations, held under Seed Co Limited, and the international operations, held under Seed Co International in order to make the VFEX secondary listing of Seed Co International Limited.

The company is also headed towards listing at the Victoria Falls Stock Exchange Limited (“VFEX”) where dual-listed companies including Seed Co International Limited, would be allowed to list their shares for trading in United States Dollars.

“The Transaction if successful may have a material effect on the price of the securities of Seed Co International Limited. Accordingly, shareholders are advised to continue exercising caution when dealing in the securities of Seed Co International Limited until further announcements,” said SCIL in a statement.