The Zimbabwe Stock Exchange (ZSE) yesterday suspended trading in Zeco Holdings shares (ZSE: ZECO) citing a violation of its listing requirements after the company entered into a large transaction without the required approvals.
Justin Bgoni, ZSE’s chief executive, said the transaction, the effect of which was to change the issuer’s sphere of activity, was done without ZSE or shareholder approval.
“The ZSE has since authorized Zeco to issue a public notice detailing the circumstances of the transaction and the proposed remedies to this violation of ZSE’s listing requirements.
“In the meantime, the ZSE will halt trading in Zeco shares until a full announcement is issued by Zeco Holdings Limited,” it said in a statement.
Mr. Bgoni added that investors would not be able to buy or sell Zeco shares during the period of the securities suspension.
ZECO Holdings is an engineering company specializing in steel fabrication and installations as well as the manufacture of plastic components and the 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’s subsidiaries include Bulawayo’s flagship Delward Engineering, which relies primarily on infrastructure projects.
In early 2020, Delward Engineering announced it was in talks with an Indonesian investor, Inka Limited, on a strategic deal that would see the country’s only railcar manufacturing company recapitalized and improve its production, but progress on this agreement have not yet been established.
Zeco’s other subsidiary, Critall Hope, is one of the largest manufacturers of window and door frames, substation doors, steel doors, roller shutter doors as well as school furniture, office and kitchen.
During the performance of the third quarter to September 30, 2021, Zeco recorded a 30% growth in its volume of activity thanks to a significant number of construction projects in Harare and its surroundings despite the challenges of Covid-19.
“It was mainly because there were a significant number of construction projects in and around Harare.
“Additionally, stalled projects were now being resumed due to the ease of Covid-19 restrictions during Q3 2021.
“We expect business activity to remain like this throughout the year and into early 2022,” the company said.
The company said improving economic activity in the country and expected normal rainfall would most likely boost the company’s increased business.
He also said that increased investment in public sector infrastructure on roads and related buildings is also expected to yield positive results for the company.