Lifestyle delisting forges ahead

HARARE - The Securities Comission of Zimbabwe (SecZim)’s bid to block Lifestyle Holdings (Lifestyle) delisting from the Zimbabwe Stock Exchange (ZSE) hit a brick wall after the High Court dismissed its application yesterday.

SecZim had filed an urgent application seeking an order to bar Lifestyle’s extraordinary general meeting (EGM) to get shareholders’ approval of its delisting plan.

The EGM is expected to be held today.

Alexander Gonese, managing director of Lifestyle’s subsidiary TN Financial Services, said SecZim’s application was dismissed on the basis that it was not urgent.

“If they (SecZim) want they can restart the process, but we are going ahead with our meeting tomorrow (today),” he said.

Tawanda Nyambirai, Lifestyle’s chief executive, also confirmed the development.

While Lifestyle had secured the High Court’s approval to hold the EGM, SecZim argues that the group had not followed certain ZSE listing rules.

The capital markets regulator also contends that Lifestyle’s proposed transaction violates corporate governance and transparency rules.

Lifestyle — formerly TN Financial Holdings Limited — decided to delist from the ZSE after failing to raise capital on the local market.

The group, which recently set up TN Harlequin Luxaire International Limited (TNHLI) in Mauritius, intends to make Lifestyle a wholly-owned subsidiary of the new Mauritian unit, necessitating the delisting from the local bourse.

TNHHLI will acquire all the issued shares of Lifestyle — listed on the ZSE in 2010 — and raise capital for the group on the international market.

“Lifestyle Holdings requires capital to sustain its furniture business and expand its fast foods division,” Lifestyle’s chairperson Harry Cantor has said.

“Its efforts to raise capital on the Zimbabwean market have not yielded any results because of the lack of long term funding,” he said, adding that “efforts to raise capital on the international markets have also proved fruitless as international investors have refused to invest citing the Zimbabwean sovereign risk.”

Cantor said the transaction would involve the issue of new TNHLI ordinary shares in exchange for Lifestyle’s.

In this case, shareholders will be entitled to receive one TNHLI ordinary share for every 253,12 Lifestyle ordinary shares held.

If the scheme is approved at a meeting to be held on March 15, 2013, Lifestyle will then seek termination of its listing on the ZSE.

“Alternatively a cash consideration of $0,0065 for every one Lifestyle ordinary share. This consideration will be paid in four equal instalments after every 90 days with the first payment date being 14 days after confirmation of the scheme by the High Court,” he said.

Recently, Lifestyle sold its subsidiary TN Bank Limited to Econet Wireless in a cash and share swap deal in which the latter increased its stake to 97,96 percent resulting in the de-listing of the financial institution from the local bourse.

Last year, Nyambirai hinted that the group was making strategic plans to penetrate the regional market as part of efforts to increase revenue streams and unlock shareholder value.

“Much as we want to see ourselves expanding and satisfying the local market, we are also looking at making inroads in the regional market.”

“The group has already made significant strides in securing markets outside the country and we have concluded and reached an agreement with a South African company to supply furniture in more than 30 outlets in South Africa,” he said.

Lifestyle’s subsidiaries include TN Asset Management (Private) Limited, TN Harlequin Luxaire (Private) Limited, TN Medical Investments (Private) Limited, TN Zambia Medical Support Services, TN Harlequin Luxaire Zambia, Pelham’s Limited and TN Medical Benefit Funds (Private) Limited. - Eric Chiriga, Business Editor

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