HomeNewsBAT surrenders 10% stake to employee share scheme

BAT surrenders 10% stake to employee share scheme


Zimbabwe Stock Exchange-listed manufacturing concern British American Tobacco (BAT) has proposed to shareholders  an indeginisation and empowerment plan that could result in the company relinquishing 10% stake to an employee share ownership trust (ESOT).

Report by Bernard Mpofu

A circular issued by Shungu Chirinda, the company’s secretary, outlines a plan by the company to dispose of 51% shareholding  in a bid to comply with local equity laws in the coming three years.
The indigenisation transaction, Chirinda said, 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.

Under the proposed plan, 26% of the company’s issued share capital is required to be held by indigenous Zimbabweans by October 28 2012. Shareholders are expected to approve or disprove proposals carried in this circular at an extraordinary general meeting slated for October 26.

The company is one of the 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.

“BAT Zimbabwe proposes to create an ESOT which shall hold 10% of the issued share capital of the company post implementation,” reads part of the circular.

Majority shareholders’, British American Tobacco International Holdings shall donate 5% stake to the employee ownership scheme.

The ESOT, the circular read:  is expected to acquire the remaining 5% on  “arm’s length terms of conditions” by way of subscription of the equivalent issued share shares.

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