THE share price of Zarclear, the investment firm, yesterday plunged nearly 7 percent after it had made an offer to delist through a repurchase of Zarclear shares from its shareholders at R4.60 a share.
The shares yesterday in later afternoon trade were 6.67 percent lower at R4.20, with the firm’s market cap at roughly R1 billion.
“Shareholders are afforded an opportunity to either monetise their investment in Zarclear at a fair price or to continue to hold shares in Zarclear in an unlisted environment. Any shareholder who does not wish to accept the share repurchase offer may retain its shareholding in Zarclear post the delisting,” it said.
The share repurchase offer, if accepted by shareholders holding at least 11 303 285 Zarclear shares, would result in Zarclear acquiring more than 5 percent of the Zarclear shares in issue.
Last year in August, Zarclear scrapped plans to delist from the JSE and A2X after a buyout offer it received was deemed too low.
However, in November Zarclear’s public shareholding fell below the minimum spread requirements for companies listed on the JSE’s main board due to the take-up of the general offer to Zarclear shareholders by Legae Peresec Capital.
Zarclear’s board said at the time the decision to delist also took into account the impact the Covid-19 pandemic had had and was anticipated to continue to have on equity capital markets in general, and on small-market-capitalisation companies such as Zarclear for an extended period.
Subsequently, in April, May and July, it cautioned its shareholders it still planned to delist subject to securing the requisite approval from its shareholders in a general meeting, and the JSE and A2X approving the company’s delisting application.
Yesterday it said the significant costs and expenses associated with the listings on the JSE and A2X as well as the poor market ratings and lack of liquidity achieved by small capitalisation investment holding companies made delisting necessary.
The delisting would be conditional on securing the approval of more than 50 percent of the votes at a general meeting, excluding any controlling shareholder, its associates and any party acting in concert.
Zarclear said its investment strategy was best served in an unlisted environment as its portfolio carried with it the inherent likelihood of a persistent discount to net asset value, which would be difficult to overcome in a listed environment.
Zarclear’s major shareholders holding in 77.09 percent of Zarclear shares in issue, had undertaken not to vote on the resolution to delist. These were Hampden Capital Proprietary, African Phoenix Investments, Zolospan and Peresec Prime Brokers.
An independent board had appointed Nodus Capital (Nodus) to provide the independent board with its opinion as to whether the terms of the share repurchase offer were fair and reasonable to Zarclear shareholders.
BUSINESS REPORT ONLINE