SEED Co Limited board has proposed to its shareholders to partially unbundle 71% of its Seed Co International Limited shares by way of a pro rata dividend-in-specie distribution as part of a strategy to unlock shareholder value for its continental operations.
BY TATIRA ZWINOIRA
In a circular published yesterday, Seed Co said the dividend-in-specie distribution will be of its 71% shares in Seed Co International consisting of 241 313 440 ordinary shares.
“In order to unlock shareholder value and position the continental operations growth, the board is proposing to partially unbundle 71% of Seed Co International. Post the proposed private placement to be carried out immediately after the unbundling, Seed Co Limited will retain 26% shareholding in Seed Co International,”the company said.
“If approved by shareholders, the partial unbundling will be achieved through the dividend-in-specie distribution to all shareholders of 241 313 440 Seed Co International ordinary shares, on the basis of 1 (one) Seed Co international share each Seed Co Limited share held and duly registered as such on the distribution record date.”
Seed Co added that shareholders registered as such on the distribution record date will be entitled to receive share certificates reflecting the number of Seed Co International shares to which they are entitled.
According to local firm IH Securities, the private placement to be done as part of the unbundling of shares of Seed Co international will involve the raising $19,2 million hard currency capital through the placement of 37 920 648 SeedCo International Limited ordinary shares.
These shares will be placed with French seed producer Vilmorin & Cie which will see them become the second biggest shareholder in Seed Co International with an 18,78% shareholding.
The amount to be raised through this equity deal is part of a $31 million requirement for the expansion projects of Seed Co International that requires immediate funding.
The overall strategy is to strengthen its continental operations which will also include the company listing on the Botswana Stock Exchange.
Seed Co International is the vehicle through which Seed Co operates its businesses on the continent.
“The principle rationale for the proposed transactions is to mobilise capital, to defend the investment already deployed in the region and fund other expansion opportunities, through a structure that will also unlock ad preserve shareholder value whilst providing direct geographical portfolio choice for investors,” Seed Co said.