BRITISH American Tobacco (BAT) Zimbabwe shareholders unanimously approved its indigenisation proposal at an extraordinary general meeting held last Friday.
Report by Fin24/Business Reporter
This means that 26% of the shareholding will be transferred to indigenous investors.
The Zimbabwe Stock Exchange-listed manufacturing concern early this month proposed to shareholders an indeginisation and empowerment plan that could result in the company relinquishing a 10% stake to an employee share ownership trust (ESOT).
Under the new shareholding structure, 10,74% will go to a corporate social investment trust that will focus on the development and support of indigenous tobacco growers, 10% to the employee share trust for the benefit of permanent BAT Zimbabwe employees, while the remaining 5,26% will be retained by existing indigenous shareholders.
The company is one of government’s targets under the controversial policy that has already seen many foreign-owned mining companies complying.
Official figures show that local investors currently hold 6,22% of the BAT’s issued share capital.
Apart from the employee share ownership scheme, the board further proposed to set up a corporate social investment (CSIT) trust which is expected to acquire 10,76% of the BAT’s issued share capital.
The indigenisation transaction, according to a circular issued by the company recently, has a potential dilution impact of 15,76% on existing shareholders. She added that the cost of implementing the transaction, which is expected to be brokered by BancABC stockbrokers, is estimated at $250 000.
In order to fund the indeginisation transactions, the board proposed to provide financial assistance to the ESOT and CSIT through loan facilities with annualised interest rate of 8%.
The group said it will continue to work with the ministry as well as the National Indigenisation and Economic Empowerment Board on the indigenisation requirements.