TELECOMMUNICATIONS firm, Econet Wireless Zimbabwe is considering renewing its share buyback authority, a move which will see the company boosts its financial position.
Share buyback authority is the approval given by shareholders to a company’s management to repurchase its own shares from the market, usually within a specific period.
This practice can increase the stock’s value, improve financial ratios like earnings per share and return excess capital to shareholders.
Econet’s decision to renew the share buyback authority will be considered as special business at the company’s annual general meeting (AGM) at the end of this month.
In a notice, Econet said if deemed fit, the company would adopt, without amendment, Article 10 of its Articles of Association.
“The meeting will consider, among other issues, the following agenda as a special resolution: That the company, as duly authorised by Article 10 of its Articles of Association, may undertake the purchase of its own ordinary shares in such manner or on such terms as the directors may from time to time determine, provided that the repurchases are not made at a price greater than 5% above the weighted average of the market value for the securities for the five business days immediately preceding the date of the repurchase and also provided that the maximum number of shares authorised to be acquired shall not exceed 10% of the company’s issued ordinary share capital.”
The firm added that considering the effect of the maximum repurchase of the shares, the directors were confident that Econet would be able to pay its debts for a period of 12 months after the AGM.
The company is, therefore, confident that its assets would exceed liabilities.
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“The share capital and reserves of the company are adequate for a period of 12 months after the date of the notice of the annual general meeting. The company will have adequate working capital for a period of 12 months after the date of the notice of the annual general meeting,” Econet said.
It added that this authority would expire at the next AGM and would not exceed beyond 15 months from the date of this resolution.
“A member of the company entitled to attend and vote at this meeting is entitled to appoint a proxy to speak and, on poll, vote in his/her stead,” Econet said.
“A proxy need not be a member of the company. Proxy forms should be forwarded to reach the office of the transfer secretaries or the group company secretary, at least 48 hours before the commencement of the meeting.”
Earlier this year, Econet bought six fintech units of Ecocash Holdings Zimbabwe Limited assets as it moves to strengthen its balance sheet.
This action has since seen a surge of more than 80% of its share price in recent weeks.
