FBC Holdings Limited will seek shareholder approval for a share buy-back programme at its Annual General Meeting (AGM) scheduled for 25 June in Harare, a move that could see the financial services group repurchase up to 10 percent of its issued shares.
A share buy-back, also known as a share repurchase programme, is a corporate action in which a company buys its own shares from shareholder.
Such transactions are often used to enhance shareholder value, improve earnings per share, provide shares for treasury purposes and demonstrate management’s confidence in the company’s financial position.
Under a special resolution to be tabled at the AGM, FBC directors are seeking authority in terms of the company’s Articles of Association and the Companies and Other Business Entities Act to purchase the company’s own shares.
According to the AGM notice, the maximum number of shares that may be acquired under the resolution will be limited to 10 percent of the ordinary shares in issue before the date of the resolution.
“The shares to be acquired under this resolution shall be ordinary shares in the Company and the maximum number of shares which may be acquired under this resolution shall be 10% (ten percent) of the ordinary shares of the Company in issue prior to the date of this resolution,” the company said.
The proposed purchase price “shall not be lower than the nominal value of the Company’s shares and not greater than 5 percent (five percent) nor 5 percent (five percent) below the weighted average trading price for such ordinary shares traded over (5) business days immediately preceding the date of purchase.”
FBC said the authority would remain in force until the next AGM, with shares acquired under the programme to be held for treasury purposes before being disposed of within 12 months.
In support of the proposal, directors said the group remains financially sound.
“The Company is in a strong financial position and will, in the ordinary course of business, be able to pay its debts for a period of 12 months after the Annual General Meeting,” the board said.
The directors also said that the company’s assets would remain in excess of liabilities, while its capital reserves and working capital would remain adequate for at least 12 months after the AGM.-herald
