GULLIVER Consolidated Ltd (Gulliver) says it intends to transform its subsidiary Residential Suburbs (Harare) (Pvt) Ltd from being wholly-owned to an associate company.
The industrial firm said it intended to reduce its stake in the subsidiary to 49,18%.
With a market capitalisation of $6,9 billion on the Zimbabwe Stock Exchange (ZSE) Gulliver’s shares are currently trading at $650, making it one of the strongest counters on the bourse.
Gulliver has already issued a cautionary statement informing shareholders about the move and advising them to be cautious when dealing with its shares on the ZSE.
The company said the proceeds of the transaction would be applied towards financing capital expenditure in the group’s core activities of steel engineering and hot-dip galvanising.
“The transaction will not only allow Gulliver to focus on core activities but will also attract the requisite technical expertise that will determine the extent and pace of the development of Marlborough residential stands,” the firm said.
The industrial firm recently organised a bonus issue of three ordinary shares for each share held by shareholders.
It said in terms of this proposed bonus issue, shareholders registered in the books of the company as at February 27 would receive a total of 32 372 361 ordinary shares.
This will increase the company’s issued share capital from 10 790 787 ordinary shres to 43 163 148 ordinary shares.
Gulliver said the proceed bonus issue was meant to enhance shareholder value and liquidity of the company’s shares.
“The directors therefore believe that the proposed bonus issue will be in the best interests of the shareholders,” the company said. “The proposed bonus issue will be achieved through the capitalisation of $16,2 billion from the distributable reserves.”
Gulliver said for the avoidance of doubt, the dividend for the period ended September 30 would only be paid to the holders of the 10 790 787 shares in issue registered in the company’s shareholders register as at February 23.
The directors said they were not aware of any possible tax implications arising from the proposed bonus issue now and in future.
“Shareholders in any doubt concerning their respective positions should consult their advisors immediately,” the company said.
Gulliver, is one of the country’s major industrial concerns, supplying various equipment to the construction industry.