Zeco sells assets – The Zimbabwe Independent

TATIRA ZWINOIRA
ROLLING stock company Zeco Holdings Limited has sold $4.5 million worth of assets to local steel services company, Eagletron International, as it focuses on property investment, it said. we learned.

Rolling stock companies, or rolling stock leasing companies, own and maintain locomotives and railroad cars, which are leased to train operating companies.

Eagletron International does business as Pump & Steel Supplies. According to a circular sent to shareholders this week, Zeco said the sales were part of its shift in focus to real estate development.

The property market has been one of the most resilient sectors in Zimbabwe, even as the country’s protracted economic crisis intensifies.

Many companies have entered the market recently encouraged by this resilience, although many say project finance has been expensive and difficult to access in Zimbabwe.

This week, global real estate giant Knight Frank confirmed that construction finance is becoming increasingly unavailable and unaffordable due to high lending costs.

He said many new developments are self-funded and analysts view sales as a strategy to give Zeco a head start as it changes direction.

“The Company has entered into a Sale and Purchase Agreement (the SPA), pursuant to which the Company has agreed, among other things, to dispose of its rolling stock assets for an aggregate cash consideration of US$4,500,000,” said said Zeco.

“The directors (including the independent non-executive directors) consider that the terms of the SPA and the assignment are in accordance with normal commercial terms and are fair and reasonable and in the interests of the company and the shareholders as a whole”, has added the firm.

Zeco said the consideration was determined after arm’s length negotiations between the company and the buyer with reference to the prevailing market price of nearby properties.

Rolling stock assets related to two properties in Bulawayo, one measuring 26,000 square meters plus permanent improvements.

Another land of 46,268 square meters was also transferred, the circular to shareholders indicates.

Zeco said that all consideration for the purchase had been paid.

The main business activities of Eagletron International are the retailing of steel and the production of various construction and mining materials, including reinforcing steel, roof sheets, brick strength and others.

“In order to unlock value for shareholders, the Board of Directors has decided to change the strategic direction of Zeco Holdings Limited from a rolling stock company to a residential and commercial real estate investment and development company.” said Zeco.

“Therefore, the directors propose to convene an extraordinary general meeting to be held on August 17, 2022 to ask shareholders to ratify the change in strategic direction of Zeco Holdings Limited from a rolling stock company to an investment company and residential and commercial real estate development.

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