LEADING tyre manufacturer, National Tyre Services Ltd (NTS) is holding an extraordinary general meeting (EGM) on May 30 to propose various changes to the company’s existing Articles of associ
NTS yesterday said the proposals would take into account various changes in legislation and regulations governing the company’s share capital structure.
The company said: “The changes to the Articles are being contemplated to bring the company’s existing Articles in line with amendments to regulatory provisions and also address anomalies in liquidity constraints relating to NTS’s share price.”
The company’s share price has been on a steady increase since December last year – moving up from $114 to $470 as of yesterday.
NTS was last year voted the country’s best performing company by the Zimbabwe Stock Exchange (ZSE).
Among the proposed changes at NTS, the directors intend to substitute existing Articles with ZSE-compliant ones providing for acquisition by the company of its shares and for a share repurchase programme.
Directors said NTS’ existing Articles dated back to 1969.
Consequently they did not encompass various changes introduced by virtue of amendments made to the laws regulating Zimbabwean incorporated companies by the Companies Act.
They said furthermore they were not adhering to the introduction of the revised listing requirements of the ZSE last year.
The company said: “The effect of the adoption of the revised NTS Articles is to enable NTS to purchase issued shares in the capital of the company and provide the requisite authorisation for the directors to undertake share repurchase programmes from time to time.”
The directors said they were proposing dividends in scrip in lieu of cash in recognition of the need to conserve cash in the business, and in the light of foreign exchange problems.
They said this would therefore enable shareholders to increase their shareholding in the company without incurring dealing costs.
They said: “In view of the growing shortage of skills in the country, the directors are recommending the formulation of a new share option scheme, with the expressed purpose of trying to retain skilled personnel in the company.”
NTS said trading of the company’s ordinary shares on the ZSE was currently illiquid and investment remained largely inaccessible to a broader pool of potential investors.
Accordingly, they were proposing a restructuring of the company’s share capital by way of a 10 for one share split.
They said this would effectively increase the authorised share capital from 40 million ordinary shares of a nominal value of 50 cents each to 400 million ordinary shares of a nominal value of five cents per share.