West Properties Holding Limited, a local property developer, has announced its plan to list on the Victoria Falls Stock Exchange (VFEX) on April 28, 2023. This is the first Initial Public Offering (IPO) in Zimbabwe since 2016 when Getbucks was listed on the Zimbabwe Stock Exchange (ZSE).
West Property Holdings has been granted approval to list both its ordinary shares and preference shares, with the intention to issue up to 5,400,000 convertible redeemable participating preference shares at a price of US$5 each, and up to 1 million ordinary shares at a price of US$10 each, raising a cumulative amount of up to US$37 million.
The IPO is aimed at accelerating the development of ongoing projects, including Pokugara Residential Estate, Millennium Heights, Pomona City, The Mall of Zimbabwe, Millennium Heights Office Park, and the Warren Hills Golf Estate.
Investors in the preference shares will have a period of 5 years before they can become ordinary shareholders, during which they will benefit from a minimum guaranteed return of 7.5 percent per year, as well as dividends from the company’s profits.
The minimum subscription for preference shares is set at US$50 (10 shares) at US$5 each, while ordinary shares are set at US$100 (10 shares) at US$10 each. West Properties aims to take the company’s annual sales from US$40 million to over US$100 million within seven years and create a balance sheet that exceeds US$1 billion in value.
West Properties chairman Dr Michael Louis alluded to the decision to list on the Victoria Falls Stock Exchange due to the extensive benefits to shareholders, including zero capital gains tax, minimum transaction costs, and the stability of shares given their trading currency in US dollars.
The company has already raised an initial private placement of the company, underwritten by Alpha Holdings Mauritius, with a minimum of 50 shareholders and has raised US$1 million. The firm’s vision is to “lay 1 billion bricks by 2050” and develop Dubai-style buildings in Zimbabwe.