LISTED hospitality giant, Meikles Limited shareholders have approved the decision to buyback the company’s shares for undisclosed reasons.
A share repurchase, or buyback, is a decision by a company to reacquire its own shares from the marketplace in order to boost the value of the stock and to improve the financial statements.
Such decisions are also taken when companies have cash on hand and the stock market is on an upswing.
In an update released soon after an annual general meeting recently, Meikles Limited Company Secretary, Thabani Mpofu revealed that the decision was approved in line with Section 128 of the Companies and Other Business Entities Act (Chapter 24:31).
The Zimbabwe Stock Exchange Listing Requirements and Article 160 of the Company’s issued ordinary share capital for cancellation were also considered.
“The maximum and minimum prices at which such ordinary shares are to be acquired will not be more than 5% above an 5 % below respectively, the weighted average market price at which ordinary shares of the Company are traded on ZSE as determined over five business days preceding the date of purchase,” Mpofu said.
Other conditions spelt out under the scheme are that in any one financial year, shall not exceed 10 % of the company’s issued share capital for cancellation, subject to the availability of sufficient revenue reserves to undertake the transfer to a capital Redemption Reserve Fund as required by law.
“The authority in terms of this resolution shall expire on the date of the next Annual General Meeting. The company is authorized to pay the transaction costs for shareholders who in terms of the share buyback scheme hold less than 1 000 shares,” Mpofu added.