HomeNewsNicozDiamond revises share buyback

NicozDiamond revises share buyback


Insurance group NicozDiamond has been forced to revise its share buyback scheme after the Securities Commission of Zimbabwe (SECZ) raised concerns over the proposal.

NicozDiamond last month announced that shareholders had approved a share buyback at its annual general meeting held on May 22.

The terms of the scheme stated that the minimum price paid would be 20% above or below the weighted average of the market price of the shares for the five days immediately preceding the date of the repurchase.

It is understood that following this announcement, the capital markets regulator approached the insurance company warning that the planned scheme was in violation of the Zimbabwe Stock Exchange (ZSE) listing requirements and rules.
Sources said the commission wrote a letter to NicozDiamond instructing the firm to put on hold its plans until the scheme was regularised.

SECZ chief executive officer Tafadzwa Chinamo yesterday told NewsDay the ZSE-listed insurance firm had rectified the anomaly and was expected to issue a statement in line with ZSE listing requirements. “The share buybacks reported were not in line with the listing rules, but that has since been rectified,” Chinamo said.

According to ZSE listing requirements; “repurchases may not be made at a price greater than 10% above the weighted average of the market value for securities for the five business days immediately preceding the date on which the transaction is effected”.

A share buyback entails a repurchase of outstanding shares by a company in order to reduce the number of shares on the market.

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