BY MTHANDAZO NYONI
LISTED wines and spirits maker, African Distillers (Afdis) has requested authority from its shareholders to repurchase its own shares. as it seeks to re-invest.
A stock buyback, also known as a share repurchase, occurs when a company buys back its shares from the marketplace with its accumulated cash.
The repurchased shares are absorbed by the company, and the number of outstanding shares on the market is reduced.
Because there are fewer shares on the market, the relative ownership stake of each investor increases.
In a notice to shareholders, Afdis company secretary Lydiah Mutamuko said the acquisitions shall be of ordinary shares, and shall not exceed 10% of the company’s issued ordinary share capital.
The company is set to hold its annual general meeting on July 27, 2022.
“Shareholders will be asked to consider and if deemed fit, to resolve with or without amendments, that the company authorities in advance, in terms of Section 128 of the Companies and Other Business Entities Act (chapter 24:31) the purchase by the company of its own shares upon such terms and conditions and in such amounts as the directors of the company may from time to time determine…,” she said.
The company said the maximum and minimum prices, respectively, at which such ordinary shares may be acquired will be not 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, as determined over the five business days immediately preceding the date of purchase.
“It will be recorded that, in terms of Companies and Other Business Entities Act and the regulations of the ZSE, it is the intention of the directors of the company to utilise this authority at a future date provided the cash resources of the company are in excess of its requirements and the transaction is considered to be in the best interests of shareholders generally,” the notice read.
“In considering cash resource availability, the directors will take account of, inter alia, the long-term cash need of the company and will ensure the company will remain solvent after the re-purchase,” the notice reads in part.”
Established in 1944, Afdis manufactures, distributes and markets branded wines and spirits and ciders for the Zimbabwean market and for export.
The company has six depots in Bulawayo, Harare, Kwekwe, Masvingo, Mutare and Victoria Falls.
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