By Own Correspondent
WestProp Holdings, a property development company, fell well short of its fundraising target during its Initial Public Offer (IPO) listing on the Victoria Falls Stock Exchange (VFEX) last week.
The company, whose principal directors are Kenneth Raydon Sharpe, Oleksandr Sheremet, and Tatiana Aleshina, managed to raise only a fraction of the intended amount.
Initially, WestProp aimed to raise a substantial sum of US$10 million by selling one million ordinary shares. However, the response from investors was lackluster, resulting in a meager total of just US$14,050 raised through the sale of 1,405 ordinary shares. This amounted to less than 0.15% of the target.
WestProp sought alternative means of raising capital and managed to secure an additional US$276,590 by issuing 55,318 preference shares.
The company also received an investment from the underwriter in the form of 600,000 preference shares. In total, WestProp raised approximately US$3,290,640, a fraction of its initial target of US$40 million.
The disappointing outcome has prompted WestProp to request an extension of the share offer from the VFEX. This request comes after a group of companies, represented by Mutumbwa, Mugabe, and Partners, challenged the listing of WestProp on the VFEX.
The companies alleged that WestProp had failed to disclose all of the ongoing litigation cases in its prospectus, and thus should not be allowed to list.
In response to the challenge, WestProp, through its legal representatives, Scanlen and Holderness, dismissed the claims made by the companies arguing that their objections exhibited a lack of understanding of corporate and commercial law matters.
However, the Securities and Exchange Commission of Zimbabwe has sided with the companies, stating that WestProp should have disclosed all litigation cases in its prospectus to enable potential investors to make informed decisions.
The commission ruled that WestProp must provide a supplementary litigation report with all necessary disclosures before the listing can proceed.
The VFEX, as per the commission’s ruling, has directed WestProp to comply with the requirement and provide the supplementary report. The exchange aims to ensure transparency and protect the interests of investors in the listing process.