ZSE Privatisation Terms Of Reference

TERMS OF REFERENCE FOR THE FINANCIAL ADVISOR

1. Background

The Zimbabwe Stock Exchange (ZSE) was established as a statutory body in terms of Section 3 of the repealed Zimbabwe Stock Exchange Act. Over the years, the ZSE has been run as a mutual society by its members (i.e. stockbrokers) and has, operationally, all the features of a mutually held exchange.

However, it has become imperative to change the exchange’s corporate structure in line with best practice and recent trends the world over which involves “demutualising” the exchange into a “for-profit” privately owned company with the view to listing it via an Initial Public Offer.

2. Objectives of the Privatisation

The primary objective of the assignment is to transform the ZSE from a statutory body into a viable public limited company and to meet any other regulatory requirements. The transformation should pave way for the listing of the exchange.

The subsequent listing of the exchange will result in the following positive developments:

o Improved governance and operational efficiency

o Removal of barriers to entry for new market participants

o Investor participation in the running of the exchange

o Improved access to resources for capital investment and growth

o Ultimately, Increased capacity to attract international investors

3. Terms of Reference of the Financial Advisor

3.1 Facilitate the production of a calendar of events for the commercialisation and subsequent listing of the Zimbabwe Stock Exchange (ZSE);

3.2 Facilitate an independent valuation of the Zimbabwe Stock Exchange in terms of both current and future values, for the purpose of determining an appropriate share price;

3.3 Provide an independent assessment of financial projections including but not limited to profitability, capital, cash flows and assets;

3.4 Preparation of the prospectus that provides details about the investment offering for sale to the public. The prospectus should contain detailed facts that an investor needs to enable him to make an informed investment decision;

3.5 Ensure appropriate and full disclosure of material information about mutual funds, stocks, bonds and other investments, description of the company’s business, financial statements, biographies of officers and directors, detailed information about their compensation, any litigation that is taking place, a list of material properties and any other relevant information;

3.6 Provide an overview of the proposed team and institutional credentials;

3.7 Provide an analysis of market conditions as well as a sector analysis;

3.8 Advise on the model to be used to determine the shareholding structure for current members of the ZSE, including the Government;

3.9 Advise on the distribution of shares to domestic and/or global institutional investors and carry out a Private placement process aimed at bringing on board strategic/technical investors as identified by Government;

3.10 Organise the distribution of shares domestically to retail investors;

3.11 Provide advice on legal issues and accounting issues. NB: It is advisable to appoint a financial advisor and a lawyer in this exercise;

3.12 Arrange for the examination of the fitness and probity of major shareholders, including directors and senior management;

3.13 Provide an indicative budget for the whole process and the criteria used to determine the budget;

3.14 Preparation of a five year business development plan/model for the new entity, i.e. the commercialised and public Exchange and ;

3.15 Any other relevant task.

Please respond by the 21^st of September 2012 to

The Chief Executive Officer

Mr T. Chinamo

20 York Avenue,

Newlands

Harare

Email: securitiescommission@seczim.co.zw