DAIRY processor Dairibord Holdings Limited (Dairibord) is seeking to buy back its shares as it moves to boost shareholder value, NewsDay Business can report.
A company may repurchase its shares to reduce the cost of capital, consolidate ownership, preserve stock prices, boost its key financial ratios and make its balance sheet attractive to investors.
Share buybacks are a way to return cash to shareholders instead of through dividends.
In a notice of the annual general meeting (AGM) slated for July 10, 2024, the firm said the acquisitions shall constitute ordinary shares which, in aggregate of any financial year, shall not exceed 10% of the firm’s issued share capital.
The firm added that the price at which such ordinary shares may be acquired will not be more than 5% above and 5% below the weighted average of the market price at which such ordinary shares are traded on the Zimbabwe Stock Exchange.
This will be determined over the next five business days immediately preceding the date of the purchase of such ordinary shares by the company, the consumer staples concern said.
“That the company as duly authorised by its Articles of Association and section 129 of the Companies and Other Business Entities Act [Chapter 24:31], may undertake the purchase of its ordinary shares in such manner or on such terms as the directors may from time to time determine, provided that acquisitions shall be of ordinary shares which, in aggregate in any financial year, shall not exceed 10% of the company’s issued share capital,” Dairibord said.
“After considering the effect of the repurchase of the shares, the directors are confident that the company will be able to pay debts for the period of 12 months after the date of the notice of the annual general meeting.”
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The firm added that it was also confident that the assets of the company will be in excess of its liabilities and that the share capital and reserves of the company will be adequate for a period of 12 months, after the date of the notice of the AGM.
However, the firm indicated that expectations were that the company will have adequate working capital for the period of 12 months, following the AGM.
Dairibord said the authority shall expire on July 10, 2025, or the next AGM.
