Innscor Africa says proposed migration to the Victoria Falls Exchange (VFEX) will enable the group to continue investments into manufacturing capabilities, extend product range and venture into new categories.
The group will seek shareholder approval for the transaction at an extraordinary general meeting to be held next month.
In a VFEX listing circular, chairman Addington Chinake said the VFEX listing would boost Innscor’s regional profile and commercial standing, which will in time, improve the group’s regional expansion prospects.
“Innscor has sought to expand and diversify its interests across the manufacturing spectrum, having concluded a US$70 million capital expenditure drive in FY2022, with a further US$56 million planned in the current financial year.
“The group remains focused on continual investment to enhance its manufacturing capabilities, extend product ranges, venture into new complementary categories, and ensure the latest technologies are employed to remain a world-class manufacturing group.
“Consequently, the board deems it appropriate to consider the delisting of Innscor from the ZSE and to support the group’s subsequent listing on the VFEX to enhance access to international capital markets,” he said.
Innscor Africa is a diversified manufacturing group spanning the milling, baking, protein, fast-moving consumer goods and other light manufacturing segments.
The group’s subsidiary National Foods is due for VFEX listing this Friday. This comes as various ZSE listed firms are considering to migrate to VFEX in search of the incentives being offered and the ability to raise capital in hard currency.
Mr Chinake said the Government’s increase in the retention ratio for exporters listed on the VFEX to 100 percent will enhance Innscor Africa’s ability to settle its foreign currency liabilities and preserve value in an inflationary environment.
“Listing on the VFEX facilitates raising USD capital, which enhances the potential for Innscor Africa Limited to grow organically and inorganically.
“The dispensation for foreign investors to repatriate proceeds from the disposal of shares is attractive to both existing and future investors,” he said.
Mr Chinake added that the VFEX provides favourable tax incentives for investors enabling the optimisation of returns which include zero capital gains tax on VFEX resident and non-resident investors and a 5 percent dividend withholding tax for foreign investors.
Among other incentives provided by VFEX includes providing a third-party de-facto US dollar valuation of Innscor and reducing potential valuation volatility.
Trading on the VFEX also results in lower trading costs, in aggregate, these amount to 2,12 percent compared to 4,63 percent on the ZSE.
Mr Chinake said Innscor will assume a greater ability to raise equity capital in foreign currency to support the group’s capital expenditure, working capital requirements and regional expansion requirements.
He said VFEX’s potential to become a regional exchange enhances Innscor’s opportunity to draw in a wider investor pool. Innscor during the 2022 financial year saw revenue growing 49 percent to $290,78 billion from $195,08 billion in the previous year.
The growth in turnover was a result of the group’s focus on broadening product ranges, investing into modern manufacturing processes, extending production capabilities, as well as ensuring product and pricing relevance across the market. – The Herald
