Shareholders of the listed Pan-African financial services company – Letshego Holdings Limited – have approved the group’s Share-buy-back mandate.
This follows another Share-buy-back approved by shareholders at last year’s Annual General Meeting (AGM) where the company sought mandate from its shareholders to buy back up to a maximum of 10 percent of the stated share capital of the company.
This was after the company experienced a series of share price falls with buy-back meant to support its share price on the stock market.
Minutes from the Letshego’s AGM held at Masa Square Hotel on the 33rd of May, 2017, shows that all shareholders in attendance at the 19th AGM voted for the resolution. The Share-buy-back mandate which was brought to the AGM as a special resolution, received overwhelming support.
Having received backing from the shareholders, Letshego will now, in terms of Section 59 of the Companies Act, reduce its stated share capital as may be determined by the directors of the company from time to time, relying heavily on terms and conditions that may be deemed fit by directors taking the interest of the company into consideration.
Some of these conditions are that only a limit of 107, 202,257 shares shall be reduced from a stated share capital of 2,144,045,143 shares such that post reduction the stated share capital would be 2,036,842,886 shares.
Alternatively 214,404,514 shares shall be reduced from a stated share capital of 2,144,045,143 shares such that post reduction the stated share capital would be 1,929,640,629 shares in the event that the Board decides not to retain any Treasury Shares and cancel all the shares subject to the Share Buy-Back.
It is also intended that the reduction of capital will not result in the company failing the solvency test as prescribed in terms of the Companies Act. The company will buy back shares not succeeding five (5) percent of the stated share capital of the company and the rest will be cancelled.
The share-buy-back mandate become effective immediately after the shareholder approval and will be implanted until the conclusion of the next AGM of the company.
The mandate is implemented in accordance with the Companies Act, the provisions of the company constitution and the requirements of the Botswana Stock Exchange (BSE) as well as all other regulatory authorities.
Research Manager at Motswedi Securities, Garry Juma, said the purpose of the share-buy-back is done either to improve shareholder value or to indirectly improve the share price.
He said in the case of Letshego it might mostly do with improving shareholder value, with the company having participated in the exercise a number of times, including when one international investor was disposing off local investments and the company bought those shares.
Founded in 1998, with this year marking the 20th anniversary of the company, Letshego was formed initially as a micro-lender, lending mainly to the government employees and deducting at source.
The group has over the years developed into a fully-fledged financial services provider, launching an ambitious strategy of becoming a Pan-African financial service provider servicing a broad range of sectors of the economy.
With a market capitalisation of P4 billion ($400 m), Letshego provides services to over 400, 000 borrowers across 11 African countries and boasting of more 150,000 savers across these countries.
Just recently, the group Managing Director Chris Low announced that the company performance in the previous year has seen its revenues reaching P2.5 billion while pre-tax profits arrived at P1 billion.