[2008-07-11]  Zeco, SA Firm Merger Talks Progress
SOR Holdings, a South African firm is concluding multi-trillion merger talks with Zeco Holdings, and the merged entity is expected to list here and on the Johannesburg Stock Exchange, it has emerged.
SOR Holdings owns significant stakes in Johannesburg and Cape Town-based electronic companies involved in electronic works and refurbishment for train coaches.
Negotiations between the two firms are now at a delicate stage with some relevant signatures from authorities here and in SA having already been obtained.
SOR does not have the capacity in SA and is seeking to utilise Zeco infrastructure in a development that could transform operations of the local firm.
Zeco is Zimbabwe's number two engineering firm by market capitalisation - $404 000 trillion - after Cafca Ltd, the electric cable maker with a market value of $424 000 trillion.
Sources said yesterday the SA company secured "big contracts" to refurbish train coaches while more contracts were expected ahead of the 2010 World Cup.
"But they do not have capacity and a marriage with Zeco will bring out an enhanced combined capacity," said a source who did not wish to be named.
"It will also be a significant move for Zeco as it will begin to operate fully. While Zeco is listed on stock market, the merged entity can do a dual listing."
Major Zeco shareholder, Mr Philip Chiyangwa confirmed yesterday that "negotiations are under way and have reached an advanced stage."
No comment could be obtained from Zeco chief executive Mr Harold Madziwo by the time of going to press as his phone went on unanswered.
Zeco Holdings has two subsidiaries - Bulawayo-based Zimbabwe Engineering Company, Critall Hope based in Harare and Corbett Roly, an electrical firm.
It listed on the domestic bourse early this year via an Initial Public Offer following a successful turnaround. Currently it has received business enquiries from countries in the region and some from the overseas.
Its famous subsidiary, Zimbabwe Engineering Company was established in 1964 under the ownership of Thomas Meikles went into provisional liquidation in 1995 due to operational difficulties.
It operated as Resco before re-branding in 1980. The company managed to build the bulk of wagon for railway operators in the region NRZ.
It also manufactured about 90 percent of NRZ wagons and locomotives and 100 percent of the Zimbabwe Iron and Steel Company requirements.
In the region, it built wagon for utilities in Zambia, Tanzania, Mozambique, Ethiopia and Kenya, making it Africa's biggest player in integrated steel industry Crittal Hope, on the other hand specialises in manufacturing of roller shutters, lift up garage doors, steel windows and doorframes, bugler bars and filling cabinets.
It has since diversified into the manufacturing of agricultural implements. Lonrho Africa formerly owned Crittal Hope before it divested from Zimbabwe a few years ago. Chiyangwa bought it in 1998.
Shares of Zeco traded unchanged at $95 million in morning trading at the ZSE. The stock has risen from its initial listing price of $24 000 in February, which represents a year-to-date growth of 395 000 percent.


Source: Herald