African Sun VFEX listing set for April 14

Zim Now Writer

Hospitality group, African Sun Limited, is set to complete its listing on the Victoria Falls Stock Exchange on April 14.

Before this, the hotel group will terminate its listing on the Zimbabwe Stock Exchange on April 2 with its shares last trading on March 31.

Shareholder approval will be sought for the transaction at an Extraordinary General Meeting scheduled for March 28.

African Sun is one of many other counters that have migrated to the VFEX, owing to its attractiveness and ability to increase the visibility of a company listed on it, which can help attract new customers, suppliers and partners.

Since the launch of VFEX, Axia, Bindura, Innscor, NatFoods, Padenga, Seed Co International and Simbisa have migrated from ZSE to the foreign currency-denominated exchange.

African Sun believes its migration to the VFEX potentially improves its regional profile and commercial standing, strengthening the company’s prospects for both local and regional expansion.

A US dollar-denominated exchange, the VFEX affords businesses the opportunity to raise capital in foreign currency, at a time the country is still battling forex shortages.

“African Sun’s capital expenditure and future growth and expansion can be better supported by foreign currency capital and a widened investor base,” said the hospitality group in a circular to shareholders.

Among other incentives, the VFEX provides extended options for capital raising, including debt listing in foreign currency in addition to lower trading costs of 2,12 percent compared to 4,63 percent on the ZSE, which allows shareholders to retain more value.

“Liquidity of the African Sun shares can be stimulated by lower trading costs of the VFEX compared to the ZSE as well as increased demand for the investment based on its ability to return foreign currency dividends.

“The VFEX allows foreign Shareholders to repatriate their dividends and proceeds from share disposals without restrictions,” said African Sun.

The VFEX also offers tax incentives for shareholders, which include a 5 percent withholding tax on dividends and no capital gains tax on share disposal, thus providing enhanced earnings for shareholders compared to the ZSE.

Trading on the VFEX also provides a hedge against inflation and currency volatility and allows businesses to have actual valuations of their investments.

Said African Sun: “The provision of a de facto third-party USD valuation of the company enables African Sun’s existing shareholders to realise the actual value of their investment and to provide a more accurate benchmark of the stock’s performance while mitigating valuation volatility.”

African Sun and its subsidiaries is a hospitality group that runs hotels, resorts, and timeshare operations in Zimbabwe. The group is currently organised into five divisions – City and Country Hotels, Resort Hotels, The Victoria Falls Hotel Partnership, Sun Leisure and Real Estate.

Its hospitality portfolio includes The Victoria Falls Hotel (operated in partnership with Meikles Hospitality, Elephant Hills Resort and Conference Centre, Caribbea Bay Resort, Great Zimbabwe Hotel, Hwange Safari Lodge, Holiday Inn Harare, Holiday Inn Bulawayo, Holiday Inn Mutare, Troutbeck Resort, Monomotapa Hotel, and Sun Leisure Tours.