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Innscor Approves Indigenisation Plan

January 27, 2014

Golden Sibanda

INNSCOR Africa Limited shareholders last Friday approved the company's indigenisation compliance plan that will result in the sale of 12,87 percent of the company's issued share capital to indigenous partners. The diversified conglomerate will increase its issued share capital from 800 million ordinary shares to 800 million shares, and 1 000 non-voting Class A ordinary shares for the employee share scheme. Innscor Africa is undertaking two share option schemes involving a strategic partner and employees towards fulfilling the country's equity laws. The Indigenisation and Economic Empowerment Act requires that 51 percent equity in foreign entities be held by indigenous black Zimbabweans. At Friday's extraordinary general meeting, shareholders approved the allocation of 50 million ordinary shares to Benvenue Investments, which is 9,23 percent of Innscor's current share capital and 8,45 percent of the enlarged share capital. Benvenue, owned by businessman and conglomerate Scotia Holdings director Mr Ray Kaukonde, will pay for the shares over 10 years at a price that is higher of 75 percent of the weighted average price of Innscor shares for the first five years or US$1,37 per share for the second five years. Innscor chief executive Mr John Koumides , who had earlier on praised Mr Kaukonde for helping "steer the company during its 10 to 12-year turbulent times", declined to comment and justify why they chose his company. "We could have gone to NSSA or any other company," he said, adding that he was "worried" about NSSA's disapproval of allocation of shares to the employee share ownership scheme which was also approved during the meeting. The sole shareholder of Benvenue is Mr Kaukonde's Muzika Rubi Holdings Limited , which is already a shareholder in Innscor Africa , holding 11 052 493 ordinary shares, about 2,04 percent of Innscor's share capital. "There has been a long established business and director relationship with Innscor, culminating in (Mr) Kaukonde serving as a director from June 1, 2003 until July 2005 when he resigned as a consequence of his appointment to the position of Governor Mashonaland East Province ." Another lot of 30 million ordinary shares will be allocated to the Innscor Africa employee share ownership trust, representing 5,54 percent of the current issued shares and 5,25 percent of the enlarged company. The shares issued to the employee share trust will have a tenure of 10 years and the price will be at the volume of the weighted average price of Innscor Africa shares over the previous 60 trading days assuming the option was exercised at the effective date of the options, June 2013 . In terms of the Zimbabwe Stock Exchange listing requirements the transactions were deemed an issue for cash and shareholders were required to waive their pre-emptive rights to the shares. Innscor said the plan, when fully implemented, will be beneficial to all the parties with the company benefiting from the inflow of new funds on issue of the shares under the options, which will be used to improve efficiencies or reduce debt. The firm said the presence of cornerstone investor in Benvenue deepens Innscor Africa's core long standing shareholder base. The company said the "board is of the view that the dilutive aspects of the options are more than offset by these benefits" and called on the company's shareholders to endorse the share options. Innscor is a Zimbabwean holding company with interests in retail, distribution, agro-processing and food manufacturing.

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Source: AllAfrica

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