Securities Commission has issues with Ariston's recapitalisation proposal

The Securities Commission of Zimbabwe has advised that as part of its objectives in terms of Part 11 (sections 4(I) a,c,e and 4 (2) c,e of the Securities Act (Chapter 24:25) it would like to inform the public of its concerns regarding the Ariston proposed recapitalisation exercise.

The Commission has raised the following as issues of concern:
1. The need for detailed background information on the underwriter Afrifresh, particularly a clearer picture on whether their involvement in the transaction is purely underwriting or the company has interest already in the group. Specifying its intensions

2. Use of an unlicensed advisor and absence of a licenced independent financial advisor.

3. The need for a detailed illustration on the dilutive impact of the transaction.

4. The need for an entire debt maturity profile so that investors/shareholders can make their own assessment on who is owed and how much.

5. Projections and impact of the recapitalisation on the business over the next five years.

6. Breakdown on application of funds, what capital expenditure will be undertaken and disclosure on the ownership status of the estates.

The concerns have already been communicated to the ZSE, Ariston management and the advisors. The company has been directed to address the highlighted issues by way of a circular and reconstitute the last EGM taking into account the concerns raised by the Commission. Members of the investing public are advised to exercise caution in exercising their rights.