The Zimbabwe Stock Exchange (ZSE) yesterday suspended trading in the Zeco Holdings shares (ZSE:ZECO ) citing breach of its listing requirements after the company entered a significant transaction without requisite approvals.
Justin Bgoni, the ZSE chief executive, said the transaction whose effect was to change the sphere of activity of the issuer was done without either ZSE or shareholder approval.
“The ZSE has since sanctioned Zeco to issue a public notice detailing the circumstances of the transaction and proposed remedial actions to this breach of the ZSE Listing Requirements.
“In the interim, the ZSE will proceed to halt trading in the shares of Zeco until issuance of a full announcement by Zeco Holdings Limited,” he said in a statement.
Mr Bgoni added that investors would not be able to buy or sell Zeco shares during the period the securities halt is in effect.
ZECO Holdings is an engineering concern that specialises in steel fabrication and installations as well as the manufacturing of plastic components and distribution of electric motors.
In May 2008, Zeco acquired assets held by Corbett Holdings (Private) Limited and its operating subsidiaries, namely Electrical and Mechanical Suppliers and Importers (Private) Limited, Halgor Estate (Private) Limited, FaiT Lux (Private) Limited and Zimplastic (Private) Limited.
Zeco subsidiaries include the Bulawayo-based flagship company Delward Engineering which relies mostly on infrastructure projects.
Early in 2020, Delward Engineering announced that it was in talks with an Indonesian investor, Inka Limited, over a strategic deal that would see the recapitalisation of the country’s sole rail wagons manufacturing company and improve its production but progress on this deal has not yet been established.
Zeco’s other subsidiary, Crittall Hope, is one of the largest manufacturers of window and door frames, substation doors, steel doors, roller shutter doors as well as school, office, and kitchen furniture.
In the third quarter performance to September 30, 2021, Zeco recorded a 30 percent growth in business volume on the back of a significant number of construction projects in and around Harare despite the Covid-19 challenges.
“This was mainly because there were a significant number of construction projects in and around Harare.
“In addition, stalled projects were now being resumed due to the ease of Covid-19 restrictions during the 3rd quarter 2021.
“We anticipate that business activity will remain like that throughout the year and the beginning of 2022,” the company said.
The company said improved economic activity in the country and expected normal rainfalls will most likely spur increased business for the company.
It also said that an increased infrastructure investment by the public sector on roads and related buildings is also expected to yield positive results for the company.
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