TN Bank delisted

HARARE - TN BANK Limited (TN Bank) was yesterday de-listed from the Zimbabwe Stock Exchange (ZSE) following its takeover by Econet Wireless Zimbabwe Limited (Econet).

Econet — Zimbabwe’s largest mobile network operator — increased its stake in TN Bank to 97,96 percent in a cash and share swap deal.

Initially, Strive Masiyiwa’s Econet held a 45 percent stake of TN Bank’s issued ordinary share capital after injecting $20 million into the financial institution in July last year.

“TN Bank has been de-listed,” a ZSE official confirmed the development.

“In terms of the ZSE’s listing rules, the bank does not qualify to remain on the bourse following its deal with Econet.

“According to the rules, 30 percent of a listed company should be in the hands of the public,” the official said, adding that TN Bank had become a private institution.

Under the takeover deal, Econet paid cash for 830 417 TN Bank shares while 72 542 997 shares were exchanged for Econet’s.

Considering that Econet was offering 15,91 cents for every TN Bank share, the cash transaction equates to $132 119.

The remaining 2,04 percent is held by minority shareholders.

“Econet… will deal with the shareholders who did not accept the offer in accordance with the provisions of the Companies Act,” the two parties said in a joint statement.

“Shareholders are hereby advised that the company’s financial year end has been changed from December 31 to February 28 to align with that of Econet,” the institutions said, adding that Bethel Equities, the sponsoring stockbrockers, will continue to accept TN bank shares on behalf of Econet on the same terms as the initial offer.

The offer acceptance rate was 96,3 percent with Econet acquiring a total 73 373 414 TN Bank shares.

A total of 76, 204, 093 million TN Bank shares had been previously held by minority shareholders.

Econet has already hinted plans to rebrand TN Bank on completion of the takeover.

While sources said the technology group had already changed TN Bank’s operating system, Econet has declined to disclose details of the rebranding exercise.

“There are several strategies which Econet is planning for TN Bank, and these include repositioning the bank’s corporate brand,” Econet’s corporate communications manager Ranga Mberi told businessdaily, adding further information would be released in due course.

The sources said the rebranding exercise is part of Econet’s efforts to align TN Bank’s operations with its interests.

Mberi said the group also intended to expand the bank’s “market share and product profile, including the successful EcoCash mobile money transfer service”.

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

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

She said new directors will be appointed and the bank will be recapitalised in line with the Reserve Bank of Zimbabwe’s requirements.

TN Bank will re-list once the trading environment has improved.

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

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