HARARE - Farming equipment manufacturer Zimplow Limited (Zimplow) is set to acquire 100 percent of Tractive Power Holdings Limited (TPH) in a minority shareholder buyout deal.

By acquiring TPH — a retailer of internationally recognised farming equipment brands — the Zimbabwe Stock Exchange-listed Zimplow would have consolidated its position in the agricultural sector.

Early this year, the Bulawayo-based company bought 57,21 percent shareholding of TPH from the Reserve Bank of Zimbabwe’s Finance Trust of Zimbabwe after the central bank shed off its quasi-fiscal activities to focus on core business.

However, Zimplow needs shareholder approval to acquire the remaining 42,79 percent shares in TPH.

“… Zimplow is offering the shareholders of TPH 191,78 new Zimplow shares for every 100 TPH ordinary shares held, with a cash alternative of $0,10 for each TPH ordinary share held,” said Zimplow.

Zimplow hopes to boost its revenue from the anticipated growth in the agriculture sector next year.

“As investment in the agriculture sector continues to grow, medium to large commercial farmers are expected to start recapitalising their farms as well. In particular, this spectrum of customers is expected to start purchasing engine drawn implements,” said the company.

Markets observers say the merge will also enhance Zimplow’s participation within the mining sector through TPH’s mining equipment subsidiary Barzem Enterprises (Private) Limited (Barzem).

TPH holds a 65 percent stake in Barzem.

“This will allow Zimplow to further diversify its revenue stream, and to some extent, smoothen the seasonal sales pattern the company experiences,” said an analyst, adding that “this transaction thus fits in well with Zimplow’s current growth drive and will ultimately result in enhanced shareholder value.”

Government and various multi-lateral institutions expect the mining sector to drive Zimbabwe’s growth in the medium term.

Meanwhile, Zimplow will also seek shareholders’ approval to change its name to Zimplow Holdings Limited, at its extraordinary general meeting to be held in January 2013.

The company will appoint three new directors to its board as well and terminate TPH’s listing on the local bourse. - Business Writer