HARARE - Zimbabwe Stock Exchange-listed TN Bank Limited (TN Bank) seeks shareholders’ approval to delist from the local bourse at its January 18, 2013 extraordinary general meeting.

This comes after telecommunications giant Econet Wireless Zimbabwe (Econet) acquired 100 percent of the financial institution early this month.

The takeover, however, awaits authorities’ approval.

TN Bank is widely viewed by economists as one of the fastest growing indigenous banks in an economy recording sluggish growth.

In a circular to shareholders TN Bank said the rationale for delisting includes the fact that the share has been illiquid and has only traded 33 days since listing in July.

The volumes traded have also been low with an average of 0,01 percent of the shares in issue being traded.
“The illiquid nature of TN Bank counter has meant that shareholders have not derived any value from the listing of TN Bank limited,” said Lorcadia Chakurira, TN Bank’s company secretary.

“The poor trading nature of the company’s share has resulted in a constant decline in the price of TN Bank share since listing,” she said.

The counter was listed at $0,32 per share and as of last week, it was trading at $0,16 — a discount of 36 percent on the company’s net asset value of $0,25 per share.

Chakurira said delisting will also allow the institution to trade at its true value as “current trading on the stock exchange is undervaluing the company.”

If approved, directors will introduce new equity investors, recapitalise the bank in line with Reserve Bank of Zimbabwe requirements and re-list once the trading environment has improved.

Under the deal, TN Bank minority shareholders will be offered Econet shares in exchange for stakes in the bank.

TN Bank shareholders were likely going to be diluted in the recapitalisation exercise of the bank to have $100 million in minimum equity capital by June 30, 2014 set by the central bank.

While TN Bank had already surpassed the $25 million required in the first phase, it still had to meet the second phase of $50 million by June 30 next year and $75 million six months later.

In such circumstances, existing shareholders would have been diluted by Econet, which has the financial muscle. - Business Writer