- ZSE has terminated trading of Bridgefort Class A and Class B
- Operational losses and declining revenues led to the voluntary delisting
- Bridgefort plans to list on the Victoria Falls Stock Exchange
Harare-The Zimbabwe Stock Exchange (ZSE) has terminated trading of Bridgefort Capital Limited shares which consists Class A and Class B effective November 26 2024, as the company volunteered to delist from the bourse.
The termination of shares comes after Bridgefort passed a resolution supporting the termination of its Class A and Class B listings on the ZSE, with the intent to list VFEX.
The delisting follows the initial communication to shareholders on October 25 2024.
Bridgefort formerly known as MedTech Holdings, is a manufacturing, retail, distribution, and services company operating in three market segments fast-moving consumer goods, medical supplies, and light industrial products.
The Class A portfolio primarily consists of consumer goods and includes a 50.1% stake in Zvemvura Trading (Private) Limited, trading as MedTech Distribution, as well as Chicago Cosmetics (Private) Limited, a 51% subsidiary of MedTech Distribution.
The Class B portfolio, focused on property, contains only bank and cash balances amounting to US$120,000.
The decision to voluntarily delist from the ZSE comes as the company has been underperforming recording losses both in operations and reduced topline.
While VFEX no longer offers a 100% increment benefit, the ability to trade shares in US dollars helps preserve shareholder value and enhances foreign investment appeal as the US dollars is not affected by value erosion.
The primary differentiating pull factor between the two exchanges is that VFEX transactions are conducted in U.S. dollars, significantly mitigating exchange rate risk.
Furthermore, since trading on VFEX occurs in a stable US dollar, which is less susceptible to volatility, the exchange plays a crucial role in safeguarding investor value through trading, reporting, and projecting in a hard currency.
Listing on the VFEX signals a lack of confidence in the local currency as a viable store of value and unit of account.
However, shareholders should remain cautious about potential risks, including integration challenges, dilution from the capital raise, and market volatility.
Despite the existing risks, the potential benefits of this dual-pronged approach may surpass the drawback.
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