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Zimbabwe Stock Exchange-listed Masimba Holdings said last Friday it has set in motion plans to unbundle its business into two separate companies as it seeks to derive maximum value from the entities.Formerly known as Murray and Roberts, the firm has operations in the construction business, through subsidiaries Masimba Construction and Masimba Properties as well as in the manufacturing sector via Proplastics.

Masimba said the units were no longer enjoying synergies that existed before due to changes in the operating environment and would operate effectively and viably as individual entities.

“The board is proposing to unbundle Masimba into two business units focused on construction and civil engineering (Masimba Construction) and manufacturing (Proplastics),” the firm said in a circular to shareholders.

“The proposed unbundling is anticipated to unlock greater value for shareholders and at the same time widen their portfolio choice.”

The two companies, to be unbundled at a cost of $120 000, will be separately listed on the ZSE.

Masimba said the existing structure was negatively impacting on the group’s ability to grow, attract new capital as well as boost its share price which could be reversed through the separation.

Shareholders, however, hold the key to the proposed business structure as they will be required to approve or reject the plans at an annual general meeting (AGM) to be held on May 29.

At the AGM, shareholders will also be required to vote for the distribution of 220,5 million shares in Pro-plastics via a dividend in specie on the basis of one new Proplastics share for every one share held in Masimba.

Justifying the proposal, the Masimba board, chaired by Mr Greg Sebborn, said the move would allow each of the companies to grow separately allowing them to focus on the core business while providing investors who might have different investment preferences with options to get into either the construction or manufacturing businesses.

“In the event that shareholders do not approve the proposed unbundling, the directors of the company believe that the disparity between the market capitalisation and the net assets value of the company will likely remain,” the board cautioned.

“It will remain difficult to attract capital into the group thus limiting growth prospects for all the different business units.” – New Ziana.