HomeBusinessPerforming counters share increases boost ZSE index

Performing counters share increases boost ZSE index

THE local bourse was abuzz with activity last week as performing counters increased shares in issue for purposes of rights offers and share option schemes.

BY OUR STAFF

Agro-industrial conglomerate, Aico Africa Limited increased shares in issue to 1 094 957 266 shares for purposes of a rights offer.

Under a rights offer, a company’s existing shareholders are entitled to buy additional shares directly from the company in proportion to their existing holdings, within a fixed period.

Under the same arrangement, the subscription price at which each share may be bought is generally at a discount to the prevailing market price.

Aico was reportedly targeting to raise US$40 million after a resolution to raise capital was passed by shareholders at an Extraordinary General Meeting (EGM) in December last year.

The company is seeking foreign investors for wholly-owned subsidiary, Cottco and food unit FMCG, and is set to finish the disposal of a 20% shareholding in Seed Co to a UK-based seed company.

In line with proposed plans for Seed Co Limited, the latter also increased an additional 24 000 shares to take total shares in issue to 205 218 326.

This was for the sole purpose of a share option scheme.

More companies in the country are embarking on share ownership schemes aimed at benefitting workers as part of steps towards the indigenisation law compliance.

Selected employees are given the right to buy shares at their current price, at a later date, under a share option scheme.
The schemes are also used as a motivating factor for employees by giving them the right to buy a specific number of shares in a company at a fixed price in future.

If the share values increase in the interim period, employees stand a chance of making immediate profits when they so choose to “exercise” their options.

Beverage manufacturer, Delta Corporation also increased shares in issue to 1 239 951 215, representing an additional 108 100 shares added.

Last month alone, Delta Corporation increased shares in issue twice.

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