By Taurai Mangudhla
ZIMBABWE Stock Exchange (ZSE)-listed blue-chip Innscor Africa Limited shareholders have given directors greenlight to buy back up to 10% of shares of the company and preserve value in the current financial year, subject to terms and conditions.
The authority is, according to results of the company’s recently held annual general meeting (AGM), valid until the date of the next AGM.
Other key decisions passed at the AGM include re-election of two directors retiring by rotation, chairman Addington Chinake and founder Zinona Koudounaris.
The AGM also approved the dividend paid by the company for the financial year ended June 30, 2021.
It also approved loans to executive directors of the company.
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The authority to buy back the company’s own shares is in terms of section 129 of the Companies and Other Business Entities Act and ZSE listing requirements.
The authority shall, in terms of this resolution, expire on the date of the next AGM and that “acquisitions shall be of ordinary shares which, in the aggregate in any one financial year, shall not exceed 10% of the company’s issued ordinary share capital.”
In terms of the conditions, the maximum and minimum prices at which such ordinary shares may be acquired will be not be more than 5% above or 5% below the weighted average of the market price at which such ordinary shares are traded on the ZSE, as determined over the five business days immediately preceding the date of purchase of such ordinary shares by the company.
Furthermore, a Press announcement should be published as soon as the company has acquired ordinary shares constituting, on a cumulative basis in the period between annual general meetings, 3% of the number of ordinary shares in issue prior to the acquisition.
This resolution, Innscor previously reported, shall be of no force and effect if during its subsistence the company is unable to declare and pay a cash dividend.
An announcement by Innscor ahead of the AGM noted that in terms of this special resolution, the directors are seeking authority to use the company’s available cash resources to purchase its own shares and will only exercise the authority if they believe that doing so would be in the best interests of shareholders generally.
In exercising this authority, Innscor said, the directors would duly take into account, following such repurchase, the ability of the company to pay its debts in the ordinary course of business, the maintenance of an excess of assets over liabilities, and for the company and group, the adequacy of ordinary capital and reserves as well as working capital.
In its latest annual results for the period to June 2021, Innscor reported that it had injected about US$70 million to consolidate its expansion operations.
The company said its short-term strategy was to build efficiencies and improve capacity utilisation across the organisation.
Innscor’s inflation adjusted post-tax profits slowed by 26,5% to $4,39 billion during the period, from $7,42 billion previously, after inflationary pressures pushed up operating costs.
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